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Economy

LPG dealers hint at another price hike in May

April 7, 2011 7:56am
Independent dealers of liquefied petroleum gas hinted Thursday at another round of price hikes in May, citing the continued instability in the Middle East.

LPG Marketers Association (LPGMA) party-list Rep. Arnel Ty said only a swift resolution of the tension in the region can avert the looming price adjustment.

"The situation in the Middle East is still abnormal. We don't know how much the price adjustment will be in May, we are keeping an eye on the price movements in the world market," Ty said in an interview on dzBB radio.

But he said there will not be any likely price hike this month.

Ty said the LPGMA is helpless to prevent any price hike since it gets its products mainly from the Middle East.

"Ang masasabi ko diyan hanggang ang sitwasyon sa Middle East, kung saan galing ang 90 porsyento ng petrolyo sa buong daigdig ay magulo, wala tayong nakikitang magandang balita," he said.

Otherwise, he said April is usually a month when LPG prices go down.

"Ito ang buwan dapat na bababa ang presyo. Yan ang isa sa wala talagang magagawang paraan ang gobyerno," he said.

VAT removal can cut fuel prices

Meanwhile, a militant think tank on Wednesday called anew for the removal of the value-added tax (VAT) from fuel products, a move it said can slash fuel prices by up to P6.60 per liter.

IBON Foundation said that without VAT, consumers would pay only P48.26 instead of P54.85 per liter for gasoline; and P41.44 instead of P47.10 per liter for diesel.

"The VAT on petroleum products is one of the largest sources of revenues for the government. Yearly since 2006, oil VAT revenues averaged P48 billion," it said in a statement.

IBON said this would translate to a difference of P6.58 per liter for regular gasoline, and P5.65 per liter for diesel.

The group also said that contrary to government claim, the bulk of VAT revenues (58 percent) do not go to social services but to debt payments.

It urged the government to find alternative measures to raise revenues that are less heavy on consumers.

Pump prices of diesel and gasoline have increased 11 times from January to April, bringing a total increase of P8.35 per liter for diesel and P6.50 per liter for regular gasoline. — LBG, GMA News
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