The National Economic and Development Authority (NEDA) is studying the proposal of the private sector to cut tariff on crude oil and petroleum products to zero amid the rising global demand for oil.
“The energy sector is proposing a tariff reduction on crude oil, refined petroleum products and asphalt from the current 3 percent to zero,” Acting Socioeconomic Planning Secretary Augusto B. Santos told reporters over the weekend.
Santos said the proposal of the small and big oil companies was now being studied by NEDA.
“We will complete the study within two weeks,” Santos said.
In 2008, Malacanang issued an order to temporary cut tariff to zero when crude oil topped US$ 100 a barrel.
Oil products originally carried a 3-percent tariff rate prior to the government’s reduction scheme. Every percentage-point cut from the rate translates to about P11 billion in foregone revenues for the government.
The government re-imposed the three percent tariff on oil in November 2008 after prices of oil in the world market have gone down.