Senator rejects hike in coal excise tax

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Sen. Sherwin Gatchalian on Tuesday expressed his opposition to the imposition of a staggered hike in the coal excise tax, saying the increase would be passed on to consumers.

In his manifestation, Gatchalian explained that “in our regime right now, coal is a direct pass-on cost to consumers, so any increase in the cost of coal” will directly affect them.

The lawmaker, who leads the Senate energy committee, said the impact of a P100 increment in the excise tax on coal will translate to a P4.78 increase in the electricity bill of an average household that consumes 200 kilowatt hours (kWh) a month.

According to him, a P200 hike in the tax translates to a P9.57 hike in the electricity bill; a P300 raise, to P14.35; and a P600 increase, almost P29 when multiplied by two.

Some 27, or one-fourth, of electric cooperatives (ECs) in the country get their power supply completely from coal.

“If you look at the number of household they serve, they serve around 2.7 million households in the 27 ECs. That’s 10 percent of the total households in the entire country,” Gatchalian said.

He pointed out that in sugar-sweetened beverages, consumers can opt for water. But in the event the price of coal surges, people can’t choose another power supplier.

“The consumers basically have no choice but to accept what is being billed to them every month. This is only the consumers, we’re not even talking [about]the industries, which are also going to be burdened directly by the increase in the excise tax on coal,” the legislator said.

The proposal to raise the tax, he added, is a sound option if the country would reduce its carbon emissions, “but because this is [a]pass-on [charge], there is no incentive for coal companies or coal power producers to reduce the consumption of coal.”

Over the past 18 months, Gatchalian said he and his colleagues have been talking about many measures to lower electricity costs.

Sen. Ralph Recto has filed a bill aimed at reducing the universal charge using Malampaya funds, while Sen. Joseph Victor Ejercito has lodged a bill aimed at lessening the impact of electricity prices to the consumers.





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