Fuel tax relief eyed as prices surge

The government is moving closer to a possible reduction or suspension of fuel excise taxes as soaring global oil prices continue to drive up pump prices in the Philippines.

The Development Budget Coordination Committee (DBCC) is finalizing its recommendation on possible fuel tax relief, Malacañang said Thursday, following a formal certification from the Department of Energy (DOE) that Dubai crude prices have breached the legal threshold for such action.

Palace Press Officer Claire Castro said the issue was not discussed during the 11th Economy and Development Council meeting last week but remains under review by the economic team.

“Nakausap po natin si (Budget) Secretary Kim de Leon at ito po ay kanilang e-evaluate at for finalization. Kapag na-finalize na po ay ibibigay po agad nila ang rekomendasyon sa Pangulo (We have spoken with Budget Secretary Kim de Leon, and they are currently evaluating and finalizing the matter. Once finalized, they will immediately submit the recommendation to the President),” Castro said.

The 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 trigger under Republic Act 12316 for the possible suspension or reduction of fuel excise taxes.

Under the law, the President may suspend or reduce excise taxes on specified petroleum products upon the recommendation of the DBCC and in coordination with the Energy Secretary. The relief may last for up to three months per instance.

The review comes as motorists face another steep round of fuel increases.

For Sept. 15 to 21, gasoline prices rose by as much as ₱5.70 per liter, while diesel increased by ₱4.31 and kerosene by ₱4.62. These followed another round of price hikes the previous week.

The DOE has linked the sustained increases to elevated global oil prices amid the continuing conflict and supply disruptions in the Middle East, including developments affecting shipments through the Strait of Hormuz.

The latest price surge has renewed pressure on the government to use available measures to cushion consumers and businesses from higher fuel costs.

In April, President Ferdinand R. Marcos Jr. ordered the suspension of excise taxes on liquefied petroleum gas and kerosene after receiving a DBCC recommendation. The taxes were restored in July after oil prices dropped below the statutory threshold.

The DBCC’s recommendation will now determine whether similar tax relief will be extended to other petroleum products as crude prices remain significantly above the level set by law.