The Tariff Commission is set to hear Wednesday a petition by Petron Corp. to either exclude or suspend the crude oil and petroleum products from the coverage of the ASEAN Trade in Goods Agreement (ATIGA) and the ASEAN-Korea Free Trade Area (AKFTA) or reduce the most favored nation rate 3 percent to zero.

The impact on the downstream oil industry of the full implementation of the zero rate of duty under the AFTA-CEPT in January 2010 and Korea’s implementation of the zero rate of duty on goods traded under the ASEAN-Korea Free Trade Agreement (AKFTA) between 2010 and 2012 prompted the petitioner to file the petition.

Petron, the country’s biggest oil company, feared that since crude oil and petroleum products are included in the coverage of the Afta-CEPT and AKFTA, imports from within the region and Korea would be slapped with no levies.

This meant Petron’s competitors, some of them multinationals with regional import hubs, could opt to source their supply requirements from within the region and Korea, giving them the chance to take advantage of zero tariffs. Petron’s imports from outside the region, on the other hand, would continue to be slapped a 3 percent duty because the MFN tariffs still remain at 3 percent.

To resolve the issue, it is either that the Philippines excludes or suspend crude oil and petroleum products from the Afta-CEPT and AKFTA list or bring down the MFN rate to zero from the current 3 percent enabling Petron a level playing field.

Likewise, Petron requests that the 1% rate of duty on fuel ethanol (implemented under EO 449 signed on July 22, 2005) be reduced to zero.

Also on the same day, the Commission will hear the request from the Ethanol Producers Association of the Philippines (EPAP) to create or extract a separate tariff line for Anhydrous Ethanol (in accordance with the Philippine National Standard) for use as fuel in an internal combustion engine or for motive power at a proposed rate of duty of 20%.

This is in line with the objective of attracting investors in the area of fuel ethanol production and assure them of tariff protection to this new industry.

The request of the Philippine Fishing Gear Industries, Inc. to reduce the tariff rate on Polyamide 6 Resin (Nylon Chip) from 10% to 0% rate of duty will also be considered during the hearing. According to the petitioner, subject article, being not locally produced, is a main component in the production of other needed raw materials (Nylon Monofilament and Multifilament Yarns) to produce Nylon Fish Nets and Twines.