IMPOSING AN AD VALOREM TAX ON CERTAIN MANUFACTURED OILS AND OTHER FUELS, BUNKER FUEL OIL AND DIESEL FUEL OIL; REVISING THE ‘RATES ON SPECIFIC TAX THEREON ABOLISHING THE OIL INDU…

WHEREAS, the current economic crisis amounts to a grave
emergency which affects the stability of the nation and requires immediate
action;

WHEREAS, it is also desirable to stabilize the prices of
petroleum products for a longer period despite exchange rate adjustments or
world market price changes;

WHEREAS, the issuance of this Decree is an essential and
necessary component of the national economic recovery program formulated to meet
and overcome the emergency;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, pursuant to the powers vested in me by the Constitution, do hereby
order and decree:

SECTION 1. There is hereby imposed on certain manufactured
oils and other fuels, bunker oil and diesel fuel oil, an ad valorem tax, as
follows:

1. Kerosene, fourteen per centum;
2. Naptha, regular gasoline and all similar products of distillation,
   twenty-five per centum;
3. Premium and aviation gasoline, twenty-five per centum;
4. Thinners and solvents, twenty-five per centum;
5. Liquefied petroleum gas, fourteen per centum;
6. Asphalt, fourteen per centum;
7. Aviation turbo jet fuel, twenty-five per centum;
8. Fuel oil, commercially known as bunker fuel oil and on all similar fuel
   oils, having more or less the same generating power, seven per centum;
   Fuel
   oil, commercially known as diesel fuel oil, and on similar fuel oils, having
   more or less the same generating capacity, twenty-two per centum.

SEC. 2. The ad valorem tax shall be based on the wholesale
posted price net of specific and domestic ad valorem taxes of the oil product
concerned, as provided by the Board of Energy.

SEC. 3. The ad valorem tax shall be paid by the
manufacturer, producer, owner, person having possession of importer, at the
same, time, in the same manner and subject to the same penalties, as the
Specific Tax, as prescribed in Presidential Decree No. 1158, as amended.

SEC. 4. Proceeds realized from the ad valorem tax shall
accrue to the General Fund.

SEC. 5. Section 153 of Presidential Decree No. 1158, as
amended, is hereby further amended to read as follows:

“SEC. 153. Specific Tax on manufactured oils and other
fuels.—On refined and manufactured mineral , oils and motor fuels, there shall
be collected the following taxes which shall attach to the articles hereunder
enumerated as soon as they are in existence as such:

“(a) Lubricating oil per liter of volume capacity, four pesos and fifty
centavos;

“(b) Naptha, regular gasoline and all other similar products of distillation,
per liter of volume capacity, one peso and twenty-nine centavos; Provided, That
on premium and aviation gasoline the tax shall be one peso and eighteen and
one-half centavos per liter of volume capacity;

“(c) On denatured alcohol to be used for motive power, per liter of volume
capacity, one centavo: Provided, That, unless otherwise provided for by special
taxes, if the denatured alcohol is mixed with gasoline, the specific tax on
which has
already been paid, only the alcohol content shall subject to the
tax herein prescribed, For the purposes of this subsection, the removal of
denatured alcohol of not less than one hundred eighty degress proof (ninety per
centum absolute alcohol) shall be deemed to have been removed
for motive
power, unless shown to the contrary;

“(d) Processed gas, per liter of volume capacity, five
centavos;

“(e) Thinners and solvents, per liter of volume capacity, one peso and twenty
centavos;

“(f) Liquefied petroleum gas, per kilogram, sixty-two and cue half centavos;
Provided, That liquefied petroleum gas used for motive power shall be, taxed at
a rate equivalent to the specific and ad valorem tax on diesel fuel oil;

“(g) Greases, waxes and petrolatum, per kilogram,
four pesos and fifty
centavos;

“(h) Aviation turbo jet fuel, per liter of volume capacity, one peso and
twenty centavos;

“(i) Fuel oil, commercially known as bunker fuel oil, and on all similar fuel
oils, having more or less the same generating power, twenty-five centavos per
liter of volume capacity.”

SEC. 6. The payments of Special Fund as provided in Section
17 of Republic Act 6173, as amended, shall be abolished; Provided, That
petroleum products in the possession of the oil companies which had been removed
from the refinery or from the bonded terminal but not yet sold, shall be subject
to the same rate of special fund impost prevailing- before the effectivity of
this Decree.

SEC. 7. The special Fund created under Section 8 paragraph
(j), of Republic Act No, 6173, as amended, is hereby abolished. Outstanding
claims against the Special Fund shall be settled from the existing resources and
the balance, if any, shall be transferred to the General Fund.

SEC. 8. There is hereby created a Special Account in the
General Fund to be designated as Oil Price Stabilization Fund for the purpose of
minimizing frequent price changes brought about by exchange rate adjustments
and/or an increase in world market prices of crude oil and imported Petroleum
products. The Fund may be sourced from any of the following:

1. Any increase in the tax collection from ad valorem tax or customs duty
   imposed on petroleum products subject to tax under this Decree arising from
   exchange rate adjustment, as may be determined by the Minister of Finance in
   consultation with the Board of Energy;
2. An increase in the tax collection as a result of the lifting of tax
   exemptions of government corporations under Presidential Decree No. 1931, as may
   be determined by the Minister of Finance in consultation with the Board of
   Energy;
3. Any additional tax to be imposed on petroleum products to augment the
   resources of the Fund through an appropriate Order that may be issued by the
   Board of Energy requiring payment by persons or companies engaged in the
   business of importing, manufacturing and/or marketing petroleum products.

The Fund created herein shall be used to reimburse the oil companies for cost
increases on crude oil and imported petroleum products resulting from exchange
rate adjustment and/or increase in world market prices of crude oil. The Fund
shall be administered by the Ministry of Energy.

SEC 9. The Minister of Finance shall promulgate the
necessary rules and regulations to implement this Decree.

SEC. 10. Sections 155 and 156 of Presidential Decree No.
1158, as amended, and all laws, decrees, executive orders, rules and regulations
and other issuances, or parts thereof, which are inconsistent herewith, are
hereby repealed, amended or modified accordingly.

SEC. 11. This Decree shall take effect on October 15,
1984.

Done in the City of Manila, this 10th day of October, in the year of Our
Lord, nineteen hundred and eighty-four.

			(Sgd.) FERDINAND E. MARCOS President of the Philippines
	By the President:
	(Sgd.) JUAN C. TUVERA
		Presidential Executive Assistant