MANILA — President Ferdinand “Bongbong” Marcos Jr. has again suspended excise taxes on liquefied petroleum gas (LPG) and kerosene after Dubai crude prices surged to nearly $100 per barrel, triggering a government mechanism aimed at cushioning consumers from soaring fuel costs.
Marcos issued Executive Order (EO) No. 125 following a recommendation from the Development Budget Coordination Committee (DBCC), ordering the full suspension of excise taxes on LPG and kerosene, subject to specified exemptions.
The move came after the Department of Energy (DOE) certified that the one-month average price of Dubai crude reached $99.41 per barrel from Aug. 13 to Sept. 11, well above the $80-per-barrel threshold under Republic Act (RA) No. 12316 that allows the President to suspend or reduce fuel excise taxes.
Under EO 125, excise taxes on LPG will be fully suspended except when it is used as a raw material for the production of petrochemical products or for motive power.
Kerosene will likewise be exempted from excise taxes during the suspension period, except when used as aviation fuel.
RA 12316 authorizes the President, upon the recommendation of the DBCC and in coordination with the DOE, to suspend or reduce excise taxes on specified petroleum products when the one-month average Dubai crude price reaches or exceeds $80 per barrel.
The tax relief may remain in effect for a maximum of three months.
EO 125 directs the DBCC, in coordination with the DOE, to review the implementation of the tax suspension and submit the required reports to the House of Representatives and the Senate.
“Based on these reports, the DBCC may recommend to the President the continuation, modification, extension, or termination of said suspension,” the order read.
The directive also provides for the automatic restoration of the regular excise tax rates either one week after the DOE certifies that the one-month average Dubai crude price has fallen below $80 per barrel or upon the expiration of the three-month suspension period.
“The excise tax rates on petroleum products shall automatically revert to the rates prescribed under Section 148 of the NIRC, as amended, without need of further issuance.”
Government agencies were also ordered to closely monitor petroleum stocks to ensure the proper implementation of the tax relief.
The DOE and the Department of Finance, through the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC), must conduct an inventory of existing LPG and kerosene stocks covered by the suspension.
The BIR and BOC are also required to provide the House of Representatives with monthly information on the declared value and volume of petroleum products covered by EO 125.
Oil companies, meanwhile, will be required by the DOE to submit monthly information detailing the cost components of petroleum products covered by the tax suspension.
The latest suspension marks the second time this year that Marcos has invoked RA 12316 to remove excise taxes on LPG and kerosene amid elevated global oil prices.
In April, Marcos suspended the same taxes for three months following another DBCC recommendation after Dubai crude prices again breached the statutory threshold./PN
