Friday, May 02, 2008

Bringing down local oil prices

An email urging people to boycott Shell and Caltex, to force these 2 oil giants to bring down their prices, then forcing other oil players to also bring down their prices, has been moving around for several weeks now. I personally have received it at least 7 times from several friends, and I have one reply to them: NO, it will not work.

That should be a cheap trick by Petron (#1 in sales), Total (#4), and/or other small oil players. If people want gas prices to go down to P30/liter, even lower, then they should boycott not only 1 or 2 gas stations, but ALL gas stations. Then they buy good walking/rubber shoes, also a good bicycle, and use less vehicles -- public or private -- that consume gasoline.

Now if they can't walk and bike to work or school often, then people may better pressure the state to bring down if not abolish, petroleum taxes. Diesel has 2 taxes -- import tax (1%) and VAT (12%). Gasoline (unleaded, premium, etc.) has 3 taxes -- import tax, excise tax (about P5.60/liter) and VAT. The application of VAT here is wrong: it slaps the VAT on the price that includes import tax and excise tax, or a tax on a tax.

Speaking of oil taxes, I emailed Sen. Mar Roxas 2 weeks ago, I asked him that since he was very vocal on the reduction if not abolition of oil taxes to make "cheaper oil", why is he silent on the reduction if not abolition of drug taxes to make "cheaper medicines"? Sa awa ng dyos, he did not reply.

I think his posturing on oil taxes is just for political gimmick, pa-cute. He knows that the DOF will not agree to it, just his political positioning for 2010 Presidential elections. Also the "Cheaper medicines" bill, I think he knows it won't bring down the price of good quality medicines. Cheap medicines are already here -- they're currently sold in public markets, variety or sari-sari stores, etc. But whether these are effective and safe medicines, that's another story.

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