RETAILERS of liquefied petroleum gas (LPG) can immediately reduce their price once President Ferdinand R. Marcos Jr. signs an executive order removing or reducing the excise tax on cooking gas.
Their readiness was expressed by former LPGMA Marketers Association Party-list Rep. Arnel Ty during Monday’s l LEAD Committee hearing.
Ty made the statement on behalf of his association which controls 15 to 25 percent of the LPG market.
He told the LEAD panel chaired by Marikina Rep. Miro Quimbo that on the question of whether fuel prices can immediately go down once the President signs the excise tax EO, “I can say that our industry can immediately implement the next day the three pesos excise tax.”
He was referring to the P3 excise for every kilogram of LPG, or P33 for an 11-kilo cylinder.
Ty said members of his association can immediately remove the excise on present inventories that have been subjected to such levy and recoup their loss on incoming supply that would not be subject to excise imposts.
“Kung anuman yung mababawas sa excise tax, at meron pa kaming existing inventory, we can recoup that once na maibalik naman ang excise tax sa susunod na mga panahon, dahil yung aming available inventory during that time has no excise tax,” he said.
“So, ganun lang naman kasimple ‘yan. So, I don’t think there should be a debate on how we implement the reduction of the excise tax on the pump price or in the cylinder for the consumer,” he said.
“So, it can be immediately removed from the selling price. Tama ba ako?” Quimbo asked, attempting to clarify what Ty had just told the committee.
“Yes… But I said it is not that difficult for the industry because our price adjustment only happens once every month, unlike gasoline and diesel, (which is) every week. So, we know what is our inventory per month or what is our carrying or existing inventory,” Ty said.
“So…our position, my position is…if today we will receive the declaration of cancelling the excise tax, we can immediately implement it tomorrow. Because in the coming months, if that excise tax will be returned, then our inventory, existing inventory will also have no excise tax. So, parang bawi lang, so sabi ko nga, it should not be a reason for us to say that there is a difficulty in how to implement it,” he said.
After hearing his former House colleague’s statement, Quimbo chided Department of Finance Undersecretary Rolando Ligon Jr., who earlier told the hearing panel that an excise tax suspension or reduction could not take effect immediately as oil firms would first have to exhaust their stocks that were subjected to excise levies.
Any excise tax removal or cut would apply only to incoming supply, Ligon said.
Quimbo thanked Ty for his declaration.
“Thank you very much. Yes, the Department of Finance, should be listening closely to this,” he said.
Ty informed the committee that the local price of LPG has gone up from P1,100 to more than P1,600 for the 11-kilogram cylinder, which most households use.
