Yet gov’t continues to implement RVAT

Since the oil deregulation law was first implemented, much of the of the oil price increases happened under the Arroyo administration, and this is not only because of the length of the president’s term but because of her continued implementation of the oil deregulation law amid public outcry, and her imposition of the reformed value-added tax (RVAT) on oil.

Oil price increases under Pres. Arroyo’s term comprise almost 42% of total increases since the first oil deregulation law in 1996.

The Arroyo administration has done little to avert rising prices of petroleum products. Since Pres. Arroyo became president, the price of premium gasoline has increased by 147%, while that of unleaded gasoline has jumped by 151 percent. Regular gasoline has increased its price by 150 percent.

Socially-sensitive oil products, meanwhile, have posted sharper increases. The price of diesel grew by 168% while that of kerosene jumped by 196 percent.

With the unrelenting oil price increases, independent think-tank IBON calls for the immediate removal of the 12% VAT on oil to mitigate the effects of skyrocketing prices on poor Filipinos.

From 2005 when the Arroyo government imposed the value-added tax on petroleum products, gasoline products have increased their price by 20 percent. Diesel and kerosene prices have increased by 17% and 19%, respectively. LPG posted the sharpest increase in price since the VAT was imposed with a 36%-hike. Fuel oil, on the other hand, has increased its price by 31 percent.

“Removing the 12% VAT on oil is urgent because of falling incomes of Filipino families, and rising prices of basic goods like rice and utility rates such as electricity,” said IBON executive editor Rosario Bella Guzman.

Removing the VAT on oil, she added, would stimulate economic activity through savings by consumers on their fuel bills, while lowering operating costs of fuel-intensive business establishments.

However, a long-term solution to the uncontainable price increases of oil is the repeal of Republic Act (RA) 8479 or the Downstream Oil Industry Deregulation Act of 1998.

“Unfortunately the Arroyo government, under whose watch oil price hikes soared tremendously, continues to implement this flawed law,” Guzman said.


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