President Ferdinand Marcos Jr. announced Monday that he has suspended excise taxes on liquefied petroleum gas (LPG) and kerosene in a bid to lower prices, as global oil costs remain elevated due to unrest in the Middle East.
The move follows the enactment of Republic Act No. 12316, which grants the President emergency powers to suspend or reduce excise tax rates on petroleum products.
“Tinanggal ko na ang excise tax sa LPG at sa kerosene,” Marcos told reporters.
According to the Department of Finance, the law takes effect 15 days after publication. Finance Undersecretary Fermin Adriano said an executive order formalizing the suspension could be issued as early as April 12 or 13.
RA 12316 authorizes the President, upon recommendation of the Development Budget Coordination Committee (DBCC) and in coordination with the Department of Energy (DOE), to suspend or reduce excise taxes when the average Dubai crude oil price reaches or exceeds USD 80 per barrel for one month.
The law also sets limits: any suspension or reduction will last no longer than three months, and the authority to exercise such powers will remain only until December 31, 2028.
Excise tax rates automatically revert to their original levels without further executive or legislative action once either of the following occurs:
- One week after the average Dubai crude oil price falls below USD 80 per barrel for a month, as certified by the DOE; or
- After three months of implementation.
The law requires the President, through the DBCC and DOE, to submit a report to Congress within 15 days of issuing a suspension order and monthly thereafter. The report must detail the basis for the policy, estimated revenue losses, and its expected impact on inflation and fuel prices, including a cost-benefit analysis.
“The report shall include a recommendation on whether the suspension or reduction of excise taxes should be maintained, modified, or lifted, and shall form part of the basis for any continued suspension or reduction,” the law states.
The Palace said the measure is intended to cushion households and industries from the ripple effects of volatile global oil markets.