The Department of Finance is awaiting the Department of Energy’s (DOE) certification that crude oil prices have breached USD80 per barrel, a level that allows for the suspension of excise tax on domestic fuel products.
“The Secretary is just waiting for the certification from the Department of Energy that the price of Dubai Crude Oil has exceeded the threshold. The SOF (Secretary of Finance) Frederick D. Go is prepared to immediately propose to the DBCC (Development Budget Coordination Committee) the suspension of 100 percent of the excise taxes on LPG (liquefied petroleum gas) and Kerosene, for the President’s approval,” the DOF said in a statement on Friday, September 11.
This came as crude oil prices already exceeded USD100 per barrel in the international market amid renewed military actions between the US and Iran.
Sec. 1 of Republic Act (RA) 12316, or An Act Authorizing the President to suspend or reduce excise tax on petroleum products, amending for the purpose section 148 of the National Internal Revenue Code of 1997, states that “The President may, upon the recommendation of the Development Budget Coordination Committee (DBCC), in coordination with the Secretary of Energy, suspend the imposition of or reduce the excise tax on fuel under this Section when the average Dubai crude oil price based on Mean of Platts Singapore (MOPS) reaches or exceeds Eighty US dollars (USD80) per barrel for one (1) month immediately preceding the issuance of the suspension or reduction order.”
The law said, “the suspension or reduction may be applied to specific petroleum products, and implemented either as a full suspension or partial reduction.”
The suspension or reduction may be put in place “for a period not exceeding three months,” it added.
Last April, President Ferdinand R. Marcos Jr. issued Executive Order (EO) 114 suspending excise taxes on several petroleum products for three months, upon the recommendation of the DBCC, after Dubai crude oil prices hit around USD93.71 per barrel as a result of the Middle East crisis.
The sustained increase in global oil prices has translated to similar jumps in the domestic market.
This week alone, kerosene prices rose P5.58 per liter, gasoline by P4.69 per liter, and diesel by P5.18 per liter, DOE data released on Monday showed.
To date, prices of diesel and gasoline range between P80 and P100 per liter. (PNA)
