Raising more revenues at the expense of nonemployed seniors
So desperate for funds to overcome the expected deficit in government revenues once personal income taxes are reduced as promised by President Duterte during his presidential campaign, Finance Secretary Carlos Dominguez III and his bright boys want us senior citizens to give up our VAT exemption privilege.
If Dominguez really believes he could raise billions of pesos in revenues at the expense of us senior citizens who are no longer gainfully employed, I suppose there is more reason for him to believe more billions of pesos could be raised from those who are making billions of pesos in profits yearly—like the oil companies.
Nothing looks wrong with those profits until you realize you are paying more than you should. In short, oil consumers are being shortchanged. Secretary Dominguez should ask Budget Secretary Benjamin Diokno how oil consumers are being shortchanged by the oil companies.
On Oct. 15, 2013, I wrote then Sen. Sergio Osmeña III, chair of the Senate energy committee, assailing the findings of the Oil Price Review Committee headed by Diokno himself that oil companies are not overpricing their products. The Diokno committee was tasked by the Department of Energy to determine if oil products were overpriced.
I explained to Osmeña how oil consumers are being shortchanged, using the Temperature Compensation (TC) method in oil pricing, which is used by many other countries. Please refer, too, to the letter titled “Local oil products are overpriced by ‘international standard’” (Opinion, 1/13/14).
TC is the norm in all international oil transactions. It makes use of a reference temperature of 15 degrees Centigrade in pricing to remove inequities brought about by temperature changes, which affect the quantity and quality of oil products. For instance, when temperatures rise, the volume of the oil increases; when temperatures fall, the volume decreases.
However, the energy content and mileage you derive from the oil do not increase even if the volume has increased with the rise in temperatures. The California Energy Commission says, “The warmer the fuel, the less energy and fewer miles to a gallon a vehicle will receive.”
In a hot country like ours, the oil becomes “ampaw.” So you end up paying more but you get less in return.
With TC, when you buy say, 500 liters of diesel and the actual temperature is 35 degrees Centigrade, and the price is P30/liter, you only pay the equivalent volume at 15 degrees Centigrade which is 500 x 0.9854 = 493 liters. So you save (500 – 493) x P30/liter = P210.00. That savings is actually the overcharge you’re paying at present. The 0.9854 is called the volume correction factor from the American Society for Testing & Materials Measurement of Petroleum Products. Dispensing pumps are equipped with computers that calculate automatically.
We, senior citizens, would like to hear what Secretary Dominguez has to say on this.
ERNIE ADAYA, [email protected]
