Malacañang to raise tariff on imported ethanol

The government will issue an executive order (EO) that will raise the tariff on imported ethanol to 20 percent, a Department of Finance official said, pointing out that this move will give domestic ethanol-oriented businesses enough protection. The policy-making Cabinet-level Committee on Tariff and Related Matters (CTRM) has recommended that the President issue the EO on higher tariff, the finance official, who requested anonymity, told reporters this weekend The executive order will likely be issued when Congress goes on recess for the Christmas holidays. Raising the tariff on alcohol fuel would encourage domestic production. “This will provide a signal to investors in ethanol production that the government supports them." Department of Trade and Industry (DTI) officials are also supporting the higher tariff on fuel ethanol from 10 percent to 20 percent, saying the shift will help ensure the country’s energy supply. The DTI chairs the CTRM’s technical committee, the group which prepares government's position on tariff-rate issues. In an earlier hearing by the Tariff Commission, industry players led by the Ethanol Producers Association of the Philippines (EPAP) said that the government should raise ethanol tariff to 20 percent. The Biofuels Law of 2006 mandates oil companies to mix 5 percent of fuel ethanol in gasoline products starting this year and to 10 percent by next year. Government estimates showed that the country would need 208.11 million liters of ethanol this year for a 5-percent minimum blend and 460.63 million liters in 2011 for a 10-percent blend. In July, EPAP reported that only 80 millions of local ethanol will be produced this year against 240 million liters in total demand. This requirement would need an increase in ethanol production in the next few years, EPAP said. The tariff increase on ethanol products would also mean additional revenues for the government, boosting the state coffers, the finance official pointed out. — JE/VS, GMANews.TV