Diesel price hike of P3.10/L, gasoline by P0.80/L this week

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The pump prices of diesel will increase by P3.10 per liter, gasoline by P0.80, and kerosene by P1.70/L effective June 21.

The exact price increment was higher than the forecast of oil companies over the weekend at P2.50 to P2.60 per liter of diesel, and gasoline by P0.50 to P0.60/L.

Unioil said it will implement the price changes, inclusive of the value-added tax, effective 6 a.m. Tuesday to reflect the changes in the international oil market, mostly due to the continuing Russia-Ukraine war.

Caltex will implement similar price increases a bit earlier, or at 12:01 a.m. also Tuesday.

This will be the third price increase for this month, after oil companies also implemented uniform increases in the prices of diesel at P4.30 per liter, gasoline by P2.15 per liter, and kerosene by P4.85 per liter, last week.

On June 7, the hike was at P6.55 per liter for diesel, gasoline by P2.70 per liter, and kerosene by P2.45 per liter.

Public transportation groups and other stakeholders have been calling for the scrapping or suspension of the excise tax on petroleum to help mitigate the increasing fuel prices.

But the Department of Finance said in a statement that suspending excise taxes on petroleum is not the most efficient approach to alleviating the conditions of affected sectors. “The better and more equitable way to address the impact of the increasing fuel prices is to provide swift and targeted support to the vulnerable sectors.”

Suspension will reduce government revenues by P105.9 billion or 0.5 percent of the gross domestic product (GDP) in 2022, resulting in a higher deficit and debt for the government, the DOF said.

An increase in deficit and debt, in turn, will potentially raise interest rates on government debt, thereby reducing much-needed fiscal space for funding crucial social and economic programs, more so now when the government needs to sustain and even boost the domestic economy’s recovery from the lingering pandemic and Russia-Ukraine conflict, it said.

“The suspension in the imposition of excise taxes on petroleum is also extremely regressive and primarily benefit higher-income households,” the DOF explained. “We will just be subsidizing the top 10 percent of Filipino households, who consume about 50 percent of total fuel consumption in 2022. This means that the larger financial benefits of the suspension will not go to the poor, but to higher income households.”/CGC