President Ferdinand Marcos Jr. has ordered a three-month suspension of excise taxes on liquefied petroleum gas (LPG) and kerosene to ease the burden on consumers amid rising global oil prices.
The directive, formalized under Executive Order (EO) 114 signed on April 16, was released Friday following confirmation from the Department of Energy (DOE) that global crude benchmarks had exceeded the threshold required to trigger emergency fiscal intervention.
According to the DOE, the 30-day average price of Dubai crude, based on the Mean of Platts Singapore (MOPS), reached $93.71 per barrel—well above the $80 trigger level set under Republic Act 12316.
Targeted Tax Suspension for Fuel Relief
The suspension applies selectively, in line with recommendations from the Development Budget Coordination Committee (DBCC), ensuring relief is focused on key sectors of consumption and production.
- LPG used as raw material for petrochemical production or motive power is covered.
- Kerosene is exempted from excise taxes, except when used as aviation fuel.
The policy includes a monthly review mechanism, allowing the government to adjust or lift the suspension depending on global oil price movements and domestic economic conditions.
Monitoring and Safeguards
To prevent misuse and ensure benefits reach consumers, the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) have been instructed to conduct immediate inventories of petroleum stocks. Oil companies must also submit monthly reports detailing product costs and pricing structures.
The DBCC will conduct monthly assessments and recommend whether the suspension should be continued, modified, extended, or terminated based on prevailing market conditions.
Automatic Reversion Rules
EO 114 provides for automatic reinstatement of excise taxes under two conditions:
- One week after the one-month average price of Dubai crude falls below $80 per barrel.
- Upon expiration of the three-month suspension period.
The order also mandates transparency measures, requiring the BIR and BOC to submit monthly reports to Congress on the volume and value of affected petroleum imports and products.
EO 114 takes effect immediately upon publication in the Official Gazette or a newspaper of general circulation, marking a temporary but significant intervention aimed at stabilizing fuel prices and protecting consumers.