BY JP LOPEZ

OIL companies yesterday said the suspension of the value added tax on oil would not automatically lead to lower pump prices.

Edgardo Chua, president of Shell Philippines, told senators during yesterday’s hearing on the proposed VAT suspension the role of oil companies is merely to collect the 12 percent tax. "Whatever the government imposes, that’s what we collect," he said.

After the tax portion is taken out, pump prices will remain dependent on the global oil prices.

Under a deregulated environment, the oil companies cannot be forced to lower prices, he said.

Chua nonetheless said the Department of Energy can look into the oil companies’ books to see how they are pricing their products. But the DOE is not a regulatory agency like the Energy Regulatory Board which can fix rates.

Senators Mar Roxas and Chiz Escudero said because of this, there is a need to amend the oil deregulation law so consumers will immediately feel the effect of the scrapping of tax on oil.

Officials from the executive department said oil smuggling has not been curbed, resulting in a loss of P16 billion yearly.

Based on energy department data, the country’s consumption of petroleum products is 12 billion liters monthly,

The Bureau of Internal Revenue and the Bureau of Customs said only 8 billion liters of oil products are actually subjected to tax.

"Kung apat na pisong VAT lamang ang pag-uusapan… P16 billion agad ang nawawala sa pamahalaan. Hindi pa natin pinag-uusapan ang excise tax. Hindi pa natin pinag-uusapan ang tariff na puwedeng i-impose sa mga produktong petrolyong inaangkat o ini-import," Escudero said.

Roxas said: "Palagay ko, hindi lang inept, negligent talaga ang gobyerno, dahilan sa mga loophole na dinadahilan nila na hindi makolekta ito."

"Dito natin nakakita na ang dalawang ahensiya (customs and internal revenue bureaus) ay hindi makapag-coordinate. Ang ahensiya na sumusubaybay sa kanila, iyong DoF (Department of Finance), hanggang sa ngayon hindi pa rin sigurado kung nadadaya tayo o hindi," he said.