QuestionsQuestions (EXECUTIVE ORDER NO. 794)
Executive Order No. 794 withdraws the tax and duty exemption on diesel fuel granted under LOI No. 839, while allowing P NOC to continue importing diesel fuel duty-free for supply-shortage purposes.
The President cites powers under Section 401 of Presidential Decree No. 1464, as amended, and under Section 1 of Presidential Decree No. 1610.
Under PD No. 1610 (effective 28 February 1979), the President may authorize tax and duty-free importation of petroleum products whose supply becomes critical during a petroleum product supply emergency, upon recommendation of the Minister of Energy.
LOI No. 839 granted tax and duty-free importation of diesel fuel (and kerosene). EO 794 withdraws that diesel fuel exemption.
The text cites easing of supply shortages for some petroleum products, declining diesel spot prices allowing imports without exemption, and the projected windfall profits (~P71 million) if the exemption continued, while still recognizing the need for an incentive to ensure supply.
The text explains that limiting the incentive to PNOC helps check windfall profits by private oil companies and indirectly recovers revenue loss from continued exemption.
PNOC may import duty-free and free from all other importation taxes and charges only upon prior clearance of the Bureau of Energy Utilization.
Only the Philippine National Oil Company (PNOC) remains authorized for duty-free imports, subject to prior clearance by the Bureau of Energy Utilization.
PNOC is authorized to import such volumes of diesel fuel as may be necessary to alleviate the diesel fuel supply shortage in the country.
It is effective immediately upon issuance (6 April 1982). “Take effect immediately” indicates no waiting period for implementation.
The text states that exemptions for other products were progressively lifted via LOI No. 1068 (for premium/regular motor gasoline, naphtha, natural gas liquids, kerosene), and LOI No. 1135 (for liquefied petroleum gas), leaving only fuel oil and diesel fuel prior to EO 794.
It withdraws the exemption for private importers but preserves an incentive limited to PNOC to ensure supply, thus aiming to reduce or prevent windfall profits while maintaining supply assurance.
No. It withdraws duty-free treatment under LOI No. 839, but still permits PNOC to import duty-free diesel fuel to address supply shortages.
Section 1 withdraws the tax and duty exemption on diesel fuel that was granted under LOI No. 839.
The Bureau of Energy Utilization; it must clear PNOC’s importation before the duty-free and tax-free treatment applies.