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Philippines: Energy department open to suspension of taxes on coal, oil
The Department of Energy (DoE) welcomes the proposal of independent power producers for the government to explore the possible suspension of excise tax and value-added taxes (VAT) on coal and oil to address the looming power rate increase.
The Philippine Independent Power Producers Association (PIPPA) said their initial estimates indicate that the effect on the price of fuel alone may reach P9.00 per kilowatt hour, given the March 3, 2022 price of coal, which was at $446 per ton.
Energy Secretary Alfonso Cusi met with power generation stakeholders last Friday to discuss the impact of increasing international coal prices and seek measures that could be collectively implemented to address the anticipated substantial increase in electric power prices.
The Energy chief welcomed the proposals of the PIPPA, which the DoE will evaluate.
The VAT exemption and excise tax suspension, Cusi said, will be raised in the National Economic Development Authority-Economic Development Committee (NEDA-EDC) meeting today (Monday).
He also requested the association to submit a formal paper on price simulations, including their recommendations in addressing the anticipated electricity price increases.
“Similar to our earlier meeting with the downstream oil industry players, we want to work with our electric power industry stakeholders in securing the sufficiency of our power supply, as well as in creating solutions to help arrest rising electricity costs,” Cusi said.
Present during the meeting were PIPPA members SMC Global Power; Aboitiz Power, Semirara Power, First Gen, Quezon Power, AC Energy, Team Energy, FDC and Meralco Power Gen/Global Business Power.
They assured the Energy chief of their firm commitment to ensure the full availability of electricity during the critical summer and election periods.
Aside from excise and VAT exemptions, PIPPA members are also pushing for other solutions to mitigate the impact of electricity rates.
These include the DoE’s assistance in form of endorsement to the Energy Regulatory Commission, for the possible recovery of the impact of fuel price increases, even on a staggered basis.
They also want the government to explore the potential of providing subsidies for electricity end-users through the Malampaya Fund.
Lastly, power producers also asked the DoE to explore the possibility of relaxing the 30-day coal inventory requirement for generation companies to better manage the scheduling their coal delivery schedules.
The PIPPA also raised their concern over the actual completion date of the Mindanao-Visayas Interconnection Project (MVIP).
They noted that based on recent pronouncements, the National Grid Corporation of the Philippines is targeting to partially energize the lines with a limited transfer capability this month.
The association stressed the urgency in fast-tracking the completion of the MVIP, which will be beneficial in augmenting the power requirements of other regions in the country.
Source: https://www.manilatimes.net/2022/03/07/business/top-business/energy-department-open-to-suspension-of-taxes-on-coal-oil/1835367