Shell’s Statement on Alleged Misdeclaration of Alkylate Imports
Aug 22, 2011
In various media reports today, Pilipinas Shell Petroleum Corporation (Shell) was reported to have defrauded the government by non-payment of excise taxes for import shipments of alkylate. We wish to clarify the following:
- Alkylate is a blending component used by Shell to meet Philippine National Standards (PNS) criteria for unleaded gasoline. Since the year 2000, the Philippine Clean Air Act required more stringent specifications established through the PNS.
- Alkylate is not a finished product but an intermediate product, thus not subject to excise tax. However, when the alkylate is further processed into finished unleaded gasoline product that is fit and ready for consumption, the finished product is subject to the payment of excise taxes before the same is released from Shell’s refinery. In other words, no excise tax is lost on the alkylate imports in question.
- Further, in a sampling and testing conducted by SGS Philippines last April 2011, under the joint request and witnessed by both Bureau of Customs and Shell, an alkylate shipment was tested and found not to meet the PNS specification for Premium Plus, Premium and Regular Gasolines.
Shell wishes to also point out that the Bureau Internal Revenue (BIR), the government agency exclusively tasked to implement and interpret the pertinent provisions of the National Internal Revenue Code, issued an individual Authority to Release Imported Goods (ATRIG) for all the alkylate importations involved in the subject claim, and recognized the same to be raw materials and/or blending components.
Shell has paid all the right taxes and strongly denies having engaged in any fraudulent activity, especially smuggling, as this is very much against its business principles.
Shell is willing to engage with interested parties to shed light on this very important matter in the spirit of fairness and transparency.
Mylene M. Santos
Pilipinas Shell Petroleum Corporation