LPG, kerosene excise tax to be suspended

MANILA, Philippines —  A recommendation to suspend excise taxes on liquefied petroleum gas (LPG) and kerosene is expected to reach the Office of the President in a few days, paving the way for a potential announcement next week.

Finance Secretary Frederick Go announced at the Department of Finance (DOF) budget hearing that he signed a resolution suspending excise taxes on select fuel products on Tuesday.

“By next week, it should be out already,” Go told reporters.

The DOF chief, who also sits on the Development Budget Coordination Committee (DBCC), said the resolution is similar to the previous three-month fuel tax relief measure, excluding diesel and gasoline.

He also explained that the covered fuel products are commonly used by vulnerable households for cooking and other daily needs.

“I think the most important thing, first and foremost, is to help ease the burden of high global oil prices on the most vulnerable sectors,” he said.

Last week, Energy Secretary Sharon Garin certified that the average price of Dubai crude oil in the past month breached the $80-per-barrel threshold, which has been transmitted to the inter-agency DBCC for evaluation.

From Aug. 13 to Sept. 11, the average benchmark price of Dubai crude oil was $99.41 per barrel.

Under Republic Act 12316, the DBCC is tasked with recommending to the President any adjustment on fuel excise taxes.

In mid-April, Marcos suspended the excise taxes on LPG and kerosene, which was later lifted in July after the Department of Energy certified that the one-month average price of Dubai crude had fallen below the threshold.

However, Go said the DBCC is not inclined to endorse the suspension of excise taxes on diesel and gasoline, saying such a measure would be “not progressive” and could result in an estimated P12 billion in monthly revenue losses.

Instead, the government provides targeted subsidies to vulnerable sectors to cushion the impact of higher fuel prices.

Go also reiterated that he is not opposed to revenue reduction measures, provided these are accompanied by corresponding revenue-enhancing measures.

In the same budget hearing, Go said the Bureau of Customs is seeking an additional P10 billion for its 2027 budget, with the construction of condemnation facilities included among its priorities.

Meanwhile, the Asian Development Bank (ADB) said the renewed increase in fuel prices and its impact on consumers may have partly driven the government’s decision to suspend excise taxes on select fuel products.

ADB country director Andrew Jeffries said fuel prices went up again in the last few weeks due to the Middle East conflict.

“We keep saying easing of that issue has a very positive effect on many economies and particularly here. Unfortunately, that hasn’t happened in the last month,” he said.

“I think that may have been partly a driver of the decision to ease those taxes again, because the people, it’s hitting consumers and especially the more poor and vulnerable people the hardest,” Jeffries added.