Energy Dept. wants base price, not tariff, for imported ethanol

The Energy Department may come up with a base price for imported ethanol, doing away with the 20-percent import duty on the commodity, a Cabinet official said Thursday.

“We are still in discussion with the ethanol producers and the oil companies. Instead of a tariff, we may have another way of pricing imported ethanol that will be favorable and [result in] a win-win situation to interested parties," Energy Secretary Jose Rene Almendras told reporters.

Almendras said he does not support a 20-percent tariff on imported ethanol because it would jack up gasoline prices.

“We’re trying to look for a way to protect pump prices. We’re looking for [a] way… where it’s going to be a win-win situation for consumers and ethanol producers," he said.

Almendras pointed out that a 20-percent tariff on imported ethanol will impact on domestic petroleum prices
as 80 percent of ethanol used in the country is imported.

“Domestic production can only fulfill 20 percent of the total demand. If you’re to going put a tariff to imported ethanol… pump prices will be more expensive, which we all want to avoid," he said.

Ethanol is a renewable, clean-burning additive to gasoline. The Biofeuls Law of 2006 mandates oil companies to blend 5 percent ethanol in gasoline products starting 2010 and a 10-percent blend staring 2011.

The Ethanol Producers Association of the Philippines is asking the government to impose a 20-percent tariff on imported ethanol.

source — JE/VS, GMANews.TV