Trillanes: Govt should ‘moderate the greed’ of oil firms

The government needs to “moderate the greed" of petroleum companies, Senator Antonio Trillanes IV has said in introducing a bill that seeks to regulate these companies’ profits. In his proposed Petroleum and Windfall Profits Tax Act of 2011, which he filed on September 8, Trillanes pushed for the regulation of “permissible profits" of petroleum companies. The government “shall impose a windfall or excess profit tax on profits made in excess thereof," Trillanes said in his bill. “It is the hope of the author that this will help ‘moderate the greed’ of petroleum companies and provide much-need relief to our overburdened citizens," he explained. The successive fuel price hikes in the country sparked a nationwide transport strike Monday, led by the militant group Pagkakaisa ng Samahan ng Tsuper at Operator Nationwide (PISTON). ‘Reasonable’ return OK but… Trillanes’ bill allows oil companies “to make a reasonable return on their capital or investment," but not beyond 12 percent of their paid-up capital every year. Firms that exceed these levels shall pay a windfall profit tax at the following rates: a. For profits in excess of 12 percent but not more than 20 percent of the paid-up capital of the company: 50 percent of the amount of profit in excess of 12 percent b. For profits in excess of 20 percent of the paid-up capital of the company: 80 percent of the amount of profit in excess of 20 percent Profits of petroleum companies that do not exceed the threshold amount of 12 percent of their paid-up capital shall be subject only to the regular corporate income tax and others imposed by the National Internal Revenue Code. Oil deregulation review Meanwhile, research group IBON Foundation welcomed the review of the Oil Deregulation Law – the supposed culprit in the overpricing of oil – as ordered by President Benigno Aquino III after meeting with transport leaders last week in Malacañang. But IBON said the Palace should not merely attribute the problem to the “lack of competition." In a statement, the group urged the Palace to also look into the oil firms’ pricing schemes and profits. “Initial estimates of IBON indicate that the oil firms have been charging an additional 20 to 22 percent more for diesel, for instance, than is called for by the increases in the price of Dubai crude," the group said. “Meanwhile, Shell, Chevron and Petron have reported net incomes of at least P152 billion over the period 2001 to 2010. The government is also benefiting from high oil prices, collecting P239.6 billion in oil VAT revenues in the last five years, or an average of some P48 billion per year," IBON added. — KBK, GMA News