The Market Monitor Minding the Nation's Business
President Ferdinand Marcos Jr. has ordered the temporary suspension of excise taxes on liquefied petroleum gas (LPG) and kerosene as the government moves to cushion consumers from surging global oil prices.
Marcos issued Executive Order No. 125 on Sept. 25, providing for the full suspension of excise taxes on LPG and kerosene, subject to specific exemptions.
The suspension covers LPG except when it is used as a raw material in the production of petrochemical products or for motive power. Kerosene is likewise covered, except when used as aviation fuel.
The measure came after the average price of Dubai crude oil, based on the Mean of Platts Singapore (MOPS) over a 30-day period, climbed to $99.41 per barrel.
The Department of Energy (DOE) had certified the price level, which was well above the $80-per-barrel threshold under the law for the government to consider suspending or reducing petroleum excise taxes. The DOE said the average Dubai crude price reached $99.41 per barrel from Aug. 13 to Sept. 11.
The Development Budget Coordination Committee (DBCC) subsequently recommended the tax suspension, leading to the issuance of EO 125 under Section 148 of the National Internal Revenue Code of 1997, as amended.
The DOE has reported that the latest surge in global oil prices has already pushed domestic fuel costs higher, with gasoline increasing by ₱5.68 per liter, diesel by ₱4.31 and kerosene by ₱4.62 during the Sept. 15-21 price adjustment period.
Under the order, the DBCC, in coordination with the DOE, will review the tax suspension 15 days after its issuance and every month thereafter.
The committee will submit its findings to the House of Representatives and Senate and may recommend that the President continue, modify, extend or terminate the suspension depending on prevailing conditions.
The DOE and the Department of Finance, through the Bureau of Internal Revenue and Bureau of Customs, were also directed to conduct an inventory of LPG and kerosene stocks existing when the order takes effect.
The latest measure forms part of the government’s response to sustained pressure from international oil prices, which has raised concerns over its impact on household expenses, transportation costs and broader inflationary pressures.