For every P1 per liter oil price hike: Government earns additional P5.5 M daily in VAT revenues

Reference: Arnold Padilla, spokesperson (0926-6246061)

For every P1 per liter oil price hike, the national government collects an additional P5.47 million in revenues everyday from the value added tax (VAT) imposed on petroleum products, the Kontra KulimVAT revealed today.

Kontra-KulimVAT, a consumer campaign launched to scrap the 12% VAT on oil and electricity to lower their rates, said that most of these additional revenues come from diesel which generates P2.12 million daily in extra VAT collections for every P1 per liter oil price increase.

“This explains why the government continues to ignore the clamor to scrap the oil VAT. But it is unconscionable that Malacañang reaps windfalls from the economic hardship of our people,” said Arnold Padilla, Kontra-KulimVAT spokesperson.

Padilla added that aside from diesel, the government also earns P1.21 million more daily in revenues for every P1 per liter increase in the price of gasoline; kerosene, P0.54 million; fuel oil, P0.96 million; liquefied petroleum gas (LPG), P0.61 million; and other petroleum products, P0.04 million.

“The government always pins the blame on the world market for the high oil prices but it is actually just an excuse to justify its self-imposed helplessness. The VAT on petroleum is a national policy and clearly, the government can choose not to implement it for the interest of the consumers,” Padilla pointed out.

He said that pump prices of various petroleum products can go down by P5 to 6 per liter if the VAT is removed.

Groups under the Kontra-KulimVAT campaign have been gathering signatures since last week asking for public support to cancel the VAT on oil and electricity. They will submit the signatures to the House of Representatives where bills for the removal of VAT on oil and power are pending. #

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Drivers, consumers in Mindanao enraged over high PRICES

Transport groups and sectors from the urban poor and professionals from various cities in Mindanao will join Monday’s nationwide transport strike in protest of the increase in rice and petroleum prices.

The groups led by local chapters of Piston and Bayan are projecting 90 to 95 percent paralysis of transportation in Davao City, Cagayan de Oro, General Santos, Butuan, and Bayugan.

Drivers and consumers blame the government for the present double whammy of increases, saying President Arroyo favors oil cartel and big business while failing to augment wages and ensure food security for the people.

The groups said the repeal of the Oil Deregulation Law would be an immediate remedy to the oil price hike. The groups also call for the scrapping of the 12% Reformed Value Added Tax (Rvat) as this would reduce five pesos from the prices of petroleum.

They also call for the implementation of the 125 peso across the board wage increase. They also support legislation for the creation of a body to monitor and regulate petroleum prices and for government to provide an oil price buffer fund.

Jeepney and tricycle drivers say that the Oil Deregulation Law has allowed unhampered increase in the prices of gasoline, kerosene and liquefied petroleum gas (LPG) and resulted to ever-increasing losses in income.

Piston Caraga said that price of gasoline, diesel and LPG rose to a staggering 357%, 434% and 356% since the implementation of the law in 1996.

Last year saw the prices of gasoline increase 18 times while LPG increased 13 times. This year, oil companies have set to add 1 peso per week starting May to July.

The increases have cut into the drivers’ daily income. According to Transmission Southern Mindanao, drivers lose more than 200 pesos a day from their income due to the increase. Tricycle drivers in General Santos lose nearly half of their income as they have to shell out 300 pesos for gasoline per day, in which they end up taking home 80 to 100 pesos for their income.

Bayan Southern Mindanao blames the government’s entry into the World Trade Organization that resulted to rice importation and increases in rice prices. Since its approval in 1995, the price of rice increased its original price of P 8 per kilo to a staggering P33 to P35 per kilo.