Gasoline in Manila costlier than the costliest in the US

Last Dec. 12, I asked why gasoline in Manila, Seaoil’s P50.99 per liter, is costlier than the costliest in the US, $3.67 per gallon (P39.45 a liter) in San Francisco. The energy department’s Zenaida Y. Monsada, director of the oil industry management bureau, replies:

“To be exact, the $3.67/gallon in the US is equivalent to P42.285/liter, using the P43.61:$1 and 3.785 liters/gallon conversion.

“Comparing US and domestic gasoline prices would be unrealistic because:

“1. The US uses the West Texas Index, much lower than Philippine benchmark Dubai crude. Last Dec. 12 the WTI was $97.92 per barrel while Dubai was $106.86, a difference of almost $10. Reason: Asian oil demand is getting stronger, while the US is weakening due to its economic crisis.

“2. Gasoline in the US has a 91RON maximum quality, while premium gas in the Philippines has minimum of 93 RON.

“3. Gasoline in the Philippines is imposed an excise tax of P4.35/liter, plus 12-percent VAT, or approximately 19-percent tax. Tax on fuel in America, particularly San Francisco, is only about 16 percent.

“The above would be the main reasons why gasoline in the Philippines is costlier than in the US.”

Good Ms. Monsada brought up the tax angle, for it is a burden on Filipino consumers. US labor is so much higher than in the Philippines. California taxpayers get their money’s worth in the form of police protection, more and more freeways, clean air, etc. In the Philippines, taxes go to pork barrel in the three branches of government. One more thing: electricity in the Philippines, despite its cheaper labor, is costlier than in the US. And this again is due precisely to the higher fuel cost to produce power, and over-taxation for pork. It’s the system. Groan!

E-mail: jariusbondoc@gmail.comJarius Bondoc (The Philippine Star)