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Prices of petroleum products are expected to further drop with the government removing the 3 percent tariff on imported finished products.

Edgar Chua, country manager of leading oil refiner Pilipinas Shell Petroleum Corp. (PSPC), said the removal of the 3 percent tariff assuming that diesel is sold at US$ 80 per barrel would be "70 to 80 centavos reduction in cost."

"Theoretically, the impact is on cost, bababa ang cost, ang pricing, I think a number of parties have already been reflecting the lower cost, so we've been matching," explained Chua.

But Chua said it would still depend on the market competition, saying "It could be more, it could be less."

However, the Independent Philippine Petroleum Companies Association (IPPCA) is objecting to the lifting of the 3 percent tariff on imported finished crude products since “it would be unfair to importers and will give refiners [like Shell] an advantage.”

Fernando Martinez, chairman of IPPCA, said importers like them will not benefit from the removal of the tariff since the cost reduction will still be dictated by market forces, especially now that international prices are on a downtrend. - PNA

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