The suspension of excise on kerosene and liquefied petroleum gas (LPG) could take effect as early as next week and last until the end of the year if approved by President Marcos, according to Finance Secretary Frederick Go.
Go said he had signed the Development Budget Coordination Committee’s (DBCC) recommendation to suspend the fuel taxes, which will be transmitted to the Office of the President for approval.
“Before it was transmitted to the DBCC, it went through the technical working committee. They endorsed it. I’m very confident it will pass,” Go told reporters on the sidelines of the Senate hearing for the proposed 2027 Department of Finance (DOF) budget on Tuesday.
“Since I signed it today (Tuesday), I believe it should be with the Office of the President within the next day or two. If you ask me, by next week, it should be out already,” he added.
A full suspension of the fuel taxes would lower the price of an 11-kilogram LPG tank by P37 and cut P5.65 from the price of kerosene per liter.
The proposed suspension comes as global oil prices surged past $100 per barrel in early September amid renewed tensions in the Middle East, well above the DBCC’s $80-per-barrel threshold.
Latest data from the Department of Energy as of Sept. 15 showed Dubai crude prices rising by $16 per barrel from the previous week. Domestic fuel prices, on the other hand, increased this week by P8.82 per liter for diesel, P6.47 for kerosene and P4.88 for gasoline.
With the latest adjustments, diesel prices have risen by P18.31 per liter over the past three weeks, while kerosene prices have gone up by P16.67 and gasoline by P15.25.
Go, however, reiterated that the government does not plan to suspend excise on diesel and gasoline, which carry higher levies.
“The conclusion of the DBCC is that if you remove taxes on diesel and gasoline, it would not be progressive. If we remove the taxes for everyone, the wealthy would benefit the most because they use the most diesel and gasoline,” Go told the Senate.
As it is, the DBCC’s decision to suspend taxes only on LPG and kerosene was based on the view that these products are more heavily used by poorer households, making the tax relief more targeted toward vulnerable consumers.
Suspending the excise on diesel and gasoline, meanwhile, would cost the government around P12 billion a month in foregone revenue.
Go said he would be open to suspending the taxes if the revenue loss could be offset by other measures.
The fuel tax relief was first allowed under Executive Order No. 114. Signed on April 16, it was lifted in June. (Nyah Genelle C. De Leon © Philippine Daily Inquirer)
