Press Releases

Salceda’s requested task force against fuel smuggling leads to seizure of 81k liters of smuggled petroleum; House tax panel chair prods BOC towards “more aggressive” enforcement

November 22nd, 2021

In the tax committee’s regular hearing today, the Bureau of Customs reported to House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) that the anti-fuel-smuggling task force he requested the Bureau to create has already been launched and has already successfully apprehended suspected smugglers.

In a presentation to the tax chair, the BOC recounted that “In February, Cong. Salceda recommended for the creation of a Task Force “Paihi” to address fuel smuggling.”

“In compliance with this, a coordination meeting between BOC, BIR, DOE, PCG and NBI was conducted on February 23, 2021 where the members agreed to provide its representatives to the Task Force,” the customs report added.

According to the BOC, a Joint Fuel Integrity and Field Testing (FIFT) Task Force was proposed to be created with representatives from the said agencies. Currently, the BOC, BIR and PCG conduct joint field testing operations against retail stations, storage facilities, tank trucks and vessels found without the fuel marker. Follow-up operations were also coordinated with DOE to verify compliance with their regulations.

These operations resulted to the seizure of 79,740.80 liters of diesel, 2,016 liters of kerosene and 2 unit of tank trucks

“I am happy that the BOC has already complied with this committee’s request. Again, this goes to show that when the Congress and the Executive work together, we can get things done.”

“I congratulate the BOC for this initial progress, and I am optimistic that we will be able to apprehend more smugglers. Just the mere threat of credible enforcement is enough deterrence against fuel smuggling. While we cannot get rid of all smuggling, we can make it so difficult that for most importers, it will be easier to just follow the law.”

Strengthen fuel marking

Salceda also asked the BOC to strengthen its fuel marking operations.

“I was insistent that we ensure that the mechanisms against fuel smuggling are in the Tax Reform for Acceleration and Inclusion or TRAIN Law. Fuel marking is the most salient of these measures. I urge the BOC to make sure we optimize this tool.”

The BOC reported that out of the 50 terminals, marking operations is conducted in 28 terminals. The bulk of marking operations are conducted in 14 terminals and 1 refinery in Luzon, 3 terminals in Visayas and 10 terminals in Mindanao. Marked fuel in Luzon is subsequently distributed to the secondary of depots of oil companies in Visayas and Mindanao.

The BOC also reported that in terms of the volume of fuel marked per region, majority of the volume marked was in Luzon with 73% or 23.74 billion liters of fuel, followed by 21% or 6.85 billion liters in Mindanao and finally, in Visayas with 6% volume share equivalent to 1.76 billion liters.

In terms of the product type, 61.07% of the volume marked was diesel with 19.76 billion liters, followed by gasoline 38.39% or 12.42 billion liters of gasoline and 0.53% or 173 million liters of kerosene.

Salceda says he expects continuous follow up reports on the measures taken by the BOC to ensure that fuel smuggling is minimized, “especially as we find a way to soften the fiscal impact of a potential reduction in fuel excise taxes,” a proposal the tax chai also principally authored.

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