Palace to DOE: Prevent fuel shortage from Shell's importation row

Malacañang ordered the Department of Energy on Monday to find ways to avert a possible fuel shortage should the Customs Bureau seize the P43 billion in assets of oil refiner Pilipinas Shell. Cabinet Secretary Silvestre Bello III said the Palace is expecting Energy Secretary Angelo Reyes to consider all options after Pilipinas Shell issued the warning last Friday. "Palagay ko naman gumagawa ng paraan si Sec. Reyes para di tayo aabot sa ganoong kalagayan na magkaroon ng shortage at magkakaroon ng pagtaas ng presyo ng gasolina, at ayaw natin ang nangyayari noong araw sa ilalim ng Martial Law na pumipila tayo naglalabas tayo ng coupons," Bello said in an interview on dzXL radio. (We expect Reyes to pull out all stops to prevent a shortage. We do not want a repeat of Martial Law years where motorists lined up and presented coupons just to get gas.) He said President Arroyo’s order to Reyes is that there will be no shortage of food or fuel. “The bottom line is that there will not be any food or fuel or any kind of shortage," he said. Last Friday, Pilipinas Shell Petroleum Corp. warned of a supply shortage and a possible shutdown of its Batangas refinery if Customs seizes its raw materials and imported products. Reyes confirmed the fears and noted Shell has an over 30 percent share of the market and is “second only to Petron." The Bureau of Customs had said it will seize Shell’s $923-million shipments coming in from February to May to force the firm to explain the alleged deficiency in taxes covering imports from 2004 to 2009 of catalytic cracked gasoline (CCG) and light catalytic cracked gasoline (LCCG). Shell disputed the tax assessments at the Court of Tax Appeals where it contended its CCG and LCCG imports are merely raw materials for the production of unleaded gasoline. It also argued that Customs had no basis in its assessment since excise taxes are supposed to be levied only on finished products for consumption and sale in the domestic market. Reyes said his department and the Bureau of Internal Revenue earlier issued the same position that Shell has no tax deficiency from its import of gasoline-blending stocks to meet the Clean Air Act requirements. - LBG/RSJ, GMANews.TV