Airline, shipping firms eye rate increase due to fuel excise tax

Airline, shipping firms eye rate increase due to fuel excise tax

FILE PHOTO: (Ryan Mendoza / Photoville International)

MANILA, Philippines — Cebu Pacific and the Philippine Airlines seek to reimpose fuel surcharges due to the series of increases in the prices of oil products.

Cebu Pacific’s Vice President for Corporate Affairs Atty. Mantaring explained that in every oil price hike, their fuel cost goes up by P20-million.

“We are proposing to impose from Davao to Manila a fix fuel surcharge of P280,” said Mantaring.

However, Cebu Representative Gwen Garcia questioned this argument.

“By some magical formula which we are unaware of the airlines are able to come up their own computation of how much they should be charging per passenger,” Garcia said.

While Maritime Industry Authority (MARINA) also noted that the fuel price hike also affects Roll On-Roll Off (RoRo) and cargo ship operations, adding that 50 percent of their operating cost goes to fuel.

“Owners are starting to increase their fare to recover in the increase of fuel prices,” said Atty. Maximo Bañares.

Jeepney and bus operators and drivers are also asking for fare increase but their petition is still pending before the Land Transportation Franchising and Regulatory Board (LTFRB).

House committee on transportation Vice Chairman Edgar Sarmiento said there is a law that would remedy the impact of high fuel prices.

“It’s in the law that once the price reaches 80 dollars per barrel, we will automatically suspend [the excise tax]. Right now, the price of oil is somewhere 74.95 US dollar per barrel,” said Sarmiento.

But the Department of Finance argued it is wrong to blame the fuel price hike on the implementation of tax reform law.

“The increase in oil excise for example for diesel it’s just one-fourth may be attributable to TRAIN. Three-fourths of the increase is really in the increase of Dubai oil and weakening of the peso,” said DOF legal and finance director Atty. Euvimil Asunscion. — Grace Casin | UNTV News & Rescue

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