QuestionsQuestions (EXECUTIVE ORDER NO. 827)
EO 827 states it is issued “by virtue of the powers vested” under Sec. 290-A of the National Internal Revenue Code and other laws.
It addresses the imbalance between supply and demand for middle distillate fuels by developing indigenous motor fuel substitutes.
It declares that the use of coconut oil as diesel fuel extender is technically and economically feasible and was successfully demonstrated.
It states that using coconut oil as a diesel blending stock will absorb the country’s coconut oil surplus, buoy up the coconut industry, and protect the livelihood of coconut farmers.
A blend of a maximum 5% coconut oil and 95% diesel fuel nationwide distribution and sale for automotive purposes.
It is exempt from the coconut levy and sales tax, and also exempt from the special fund impost and specific tax normally applied to diesel fuel.
It covers coconut oil used as engine fuel either in its pure state or as a blending component for diesel fuel.
It frames use within a program using a maximum 5% coconut oil blend with 95% diesel for automotive purposes nationwide distribution and sale.
The Ministry of Energy, in consultation with the Ministers of Finance and the NEDA, upon recommendation of the Commissioner of Internal Revenue.
Implementation requires that the Ministry of Energy act upon recommendation of the Commissioner of Internal Revenue.
It takes effect immediately.
It indicates that the President’s authority to grant tax exemptions is grounded in a specific provision of the NIRC (Sec. 290-A), showing the legal basis for the tax exemption policy.
It is a fiscal incentive and regulatory directive: it grants tax and levy exemptions and mandates agencies to issue rules to implement an alternative fuel (coco-diesel) program.
It links program success to supply stability, implying that implementing rules may address sourcing, procurement, or distribution requirements to ensure consistent coconut oil availability for blending.
It states that to make the use economically viable at present prices of diesel and coconut oil, coconut oil must be exempt from specified taxes and imposts normally applicable to diesel fuel.