The Senate Energy Committee is mobilizing to prevent premature increases in electricity and fuel prices as a result of the new excise tax rates imposed by RA 10963, the Tax Reform for Acceleration and Inclusion (TRAIN) Act.
Pursuant to Senate Resolution No. 581, filed by Senator Win Gatchalian earlier this week, the energy committee will conduct on Thursday an inquiry into the existing inventories of coal and oil, to ensure that consumers are not being made to pay higher prices on old fuel and coal stocks which are not covered by the new excise taxes.
The resolution notes that Department of Energy (DOE) circulars have required oil-based generation companies, oil companies and bulk suppliers, and refiners to maintain a minimum 15 to 30 day inventory or in-country stock of petroleum products and fuels, while coal power plants must maintain a minimum 30-day coal running inventory. Increases in electricity and fuel prices should only take effect once these old reserves have been depleted and new inventories, which should have entered the country after January 1, 2018, are already being used.
Gatchalian, the chairman of the energy committee, said the legislative inquiry was necessary to monitor and evaluate electricity and fuel prices, as well as DOE’s efforts to prevent and deter possible abuses in the form of premature increases in generation charges and pump prices. He noted that although DOE has issued guidelines to monitor oil reserve levels, similar guidelines for coal stocks have yet to be issued.
“Unfortunately, the increases in excise taxes on coal and fuel present the perfect opportunity for stealthy price gouging, because consumers are already expecting prices to increase anyway. This hearing will help protect the hard-earned money of consumers from unscrupulous individuals who are trying to charge them too much, too soon for fuel and electricity,” Gatchalian said.