News

As Oil Closes Above $100 A Barrel For First Time:
Roxas Pushes Zero Vat On Oil To Ease Consumer Price Increases
February 21, 2008

After the price of crude oil closed above $100 a barrel for the first time on the New York Mercantile Exchange, Sen. Mar Roxas urged Congress to summon enough political will to suspend the value-added tax (VAT) on oil and petroleum products.

Roxas said the proposed suspension of the 12% VAT on oil, as proposed in Senate Bill No. 1962, would in a big way help ease inflation, which rose to a 15-month high of 4.9 percent in January, as consumer prices surged across all commodity groups.

“Wala tayong pagdududa na itong pagtaas ng presyo ng krudo ay magdudulot ng pagtaas ng presyo ng mga bilihin. Kaya dapat nang i-suspinde ang VAT sa langis para pigilan ang pag-akyat pa ng mga presyo ng bilihin,” Roxas said.

“The suspension of the VAT on oil will definitely help restrain consumer price increases going forward, and extend direct and material relief to our people, particularly those getting fixed wages," said Roxas, chairman of the Senate Committee on Trade.

Roxas said that suspending the VAT now is the best safety net in these times of high prices of goods, coupled with escalating political tensions amid fresh accusations of massive corruption in the botched National Broadband Network project.

“Let’s take advantage now of the ‘goodness of heart’ of some people in Malacañang. But instead of P500,000 per witness, why don’t they give a break to the people worth P4 per liter of diesel or P65 per 11-kilo tank of LPG?” he quipped.

Crude oil prices soared amid persistent concern as to whether production can keep up with rising global demand.  The price closed at $100.01 on the Nymex on Tuesday – the first-ever close above the $100-a-barrel mark.

Earlier, the National Statistics Office (NSO) reported that the country's inflation surged to 4.9 percent in January. This was more than two percentage points higher than the 2.8 percent average inflation in 2007. Furthermore, the prices of rice, corn, cereal, dairy products, eggs, fish and fruits all went up sharply in January.

“Hindi lang transportasyon ang apektado dito. Ang mga magsasaka at mangingisda natin ay biktima rin ng abot-langit na presyo ng petrolyo, na ginagamit nila sa kanilang mga bangka at sa irigasyon,” Roxas said.

"Our proposal to temporarily lift the VAT on oil is a fair, sensible and practical way for us to provide direct relief to ordinary Filipinos. We will be helping not only small food producers, but also plain consumers," he said.