Power

Shell to comply with fuel marking scheme despite concerns

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Top management of Pilipinas Shell Petroleum Corporation vowed to comply with the fuel marking scheme being introduced by the government to deter smuggling of fuel products into the country.

Fuel marking which involves use of low concentrations of dyes to be blended with fuel in order to determine whether shipments have gone through legal import channels is mandated under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

“We wholeheartedly support the government’s intention to curb smuggling. We would want to work with them to help curb smuggling.

Fuels marking is enacted into law so we need to find a way to comply,” Pilipinas Shell President and Chief Executive Officer Cesar Romero said in a press briefing held in Makati City on Tuesday.

Romero, however, expressed his concerns on the implementation of the initiative particularly the process of installation of markers on its fuel products.

“As the government has described the process, the winning contractor will be installing it in our facilities. Discussions there will be on how do you time it, what engineering standards will be used to ensure that it is safe in operations and that the supply will not be disrupted because they will be the ones introducing the marker into our facilities,” he stated.

The implementation of the fuel marking scheme was started last March with around 15.2 billion liters of imported and locally-produced
gasoline, diesel and kerosene subjected for marking this year according to the Department of Finance (DOF).

Marked fuel will show that importers of petroleum paid the required tariffs and went through all necessary steps before selling their products to the market.

The DOF has awarded the fuel marking contract to the joint venture of Switzerland-based SICPA SA and SGS Philippines.

They are tasked to provide a unique chemical marker for gasoline, diesel and kerosene and also administer the tests on these products.

Under the plan, the government will pay the PHP 0.6884 per liter fuel marking fee for the first year of implementation, while for the second
to fifth year, this will be shouldered by the oil companies. This fee is on top of the duties and taxes to be collected by the Bureau of Internal Revenue and the Bureau of Customs.

The Finance Department expects to capture at least PHP 20-40 billion worth of foregone import duties from smuggled or misdeclared petroleum products each year through the marking scheme. (PNA)

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