(File photo)

MANILA – A lawmaker on Tuesday said the temporary provision regarding the automatic fuel tax cut under the Tax Reform for Acceleration and Inclusion (TRAIN) law should be made permanent to bring down the cost of fuel and provide instant relief to the Filipino people.

In a statement, Camarines Sur Rep. Luis Raymund Villafuerte said the TRAIN law’s provisional authority to suspend the fuel excise tax whenever the USD80-price cap is breached ended in 2020.

Villafuerte said the proposed tax suspension aims to shield ordinary Filipinos from "further adversities that may be caused by unforeseen economic downturns.”

“Geopolitical conflicts and other developments in world markets have been driving up the cost of petroleum products, which, in turn, have jacked up transportation expenses and food prices responsible for the seemingly unending elevated inflation that now threatens to slow the global economy and possibly even lead to recession in most parts of the world,” Villafuerte said.

He cited the Philippine Statistics Authority (PSA) report that inflation soared to a 14-year record of 8.1 percent last December, the highest since the 9.1 percent clip in 2008 and the ninth consecutive month in 2022 that the pace of commodity price hikes breached the target range of 2 percent to 4 percent set by the Bangko Sentral ng Pilipinas (BSP).

He stressed the need to find a "surefire way" to cushion the economic impact on ordinary Filipino consumers of the fluctuating fuel prices, noting that the most feasible means to do this is through the permanent suspension of the excise tax imposed on petroleum products whenever the global rate hits the TRAIN-set threshold of USD 80 per barrel over a three-month period.

“This is the best way for Malacañan Palace and the 19th Congress to take the edge off the economic shock inflicted on our consumers by the never-ending rise in the cost of living, especially now when Filipinos are barely recovering from the almost three-year global economic and health crises caused by the Covid-19 pandemic," he said.

The excise tax is currently pegged at PHP10 per liter of regular and unleaded premium gasoline and PHP6 per liter of diesel, he noted.

“Add to this the VAT (value added tax) of 12 percent, and anyone could see how taxes have resulted to the hefty increase not only in the price of fuel itself but also in the cost of other goods that rely on fuel for their production and/or transportation," he said.

He said the retail cost of gasoline and diesel went up by PHP1.30 and PHP1 per liter, respectively, on Tuesday, the third successive upward adjustment in pump prices this January.

Prior to this week’s round of adjustment, a monitoring report of the Department of Energy (DOE) showed that prices since the start of January already logged per liter net increases of PHP5.90 for gasoline and PHP2.05 for diesel. (PNA)