‘Interface’ can be source of more gov’t revenues
The government should consider “interface” as possible source of additional government revenues.
I am referring to the “interface.” It is generated every time petroleum products are moved through a fuel pipeline from the oil refineries in Batangas to the fuel depots in Pandacan.
The interface is an unavoidable nuisance in long-distance pipeline operations, where different petroleum products are pumped through the pipeline in sequence, one type after another. For instance, every time diesel and gasoline are pumped through the pipeline, a buffer of around 80,000 liters of kerosene is pumped in between them to separate the two products and prevent gasoline from contaminating diesel. In the process, 80,000 liters of kerosene and some 40,000 liters of gasoline and 40,000 liters of diesel become interface. This is collected in interface storage tanks and later injected into incoming batches of premium gasoline, thus converting 80,000 liters of kerosene and 40,000 liters of diesel into premium gasoline.
Since the excise tax of kerosene is P0.60/liter and that of gasoline is P4.35/liter (excise tax is built-in in the prices of petroleum products) Shell and Caltex (the two companies that use the pipeline and sell kerosene/diesel interface as premium gasoline) each “over-recover” from the consumers P300,000 every week or a combined total of 10.4 million per year, on every 80,000 liters of kerosene turned into premium gasoline. (Pumping operations are done once a week for each company. This means a combined total of P28.8 million per year for both Shell and Caltex.) For diesel and gasoline, the excise tax difference is P2.72/liter, which translates for both companies into an over recovery of P10.4 million per year on the 40,000 liters of diesel. All this money should be collected by the government since these companies are not supposed to over recover specific taxes from the consumers.
In addition to the excise taxes, there is of course the difference in the wholesale prices of these products. Because of the large differences in the prices of the products involved, the interface contributes to the large incomes of these two oil companies. The government should collect the incomes from the interface.
The gasoline/kerosene/diesel interface is just one kind of interface generated in the pipeline. The other is the kerosene interface injected into diesel, thus upgrading kerosene into diesel. This also results in the over recovery and added income for both companies because of the difference in the prices of kerosene and diesel.
The Department of Energy does not monitor the quality of the products passing through the pipeline. The injection of the interface poses a risk on the quality of the products. The oil deregulation law mandates the DOE to monitor the quality of petroleum products sold in the market.
It is about time Congress reviewed the oil deregulation law.
—ERNIE ADAYA,
