(Photo by Yancy Lim)
MANILA – President Ferdinand Marcos Jr. has ordered the temporary suspension of excise taxes on liquefied petroleum gas and kerosene following a sharp increase in global oil prices.
Under Executive Order 125, the excise tax on LPG will be fully suspended, except when used as raw material for petrochemical production or for motive power. The tax on kerosene will also be suspended, except when used as aviation fuel.
The order followed a recommendation from the Development Budget Coordination Committee after the Department of Energy certified that the one-month average Dubai crude price reached USD 99.41 per barrel from Aug. 13 to Sept. 11.
The figure was well above the USD 80-per-barrel threshold under Republic Act 12316, which allows the President to suspend or reduce excise taxes on specified petroleum products upon the DBCC’s recommendation and in coordination with the DOE.
The suspension may remain in effect for up to three months. Excise tax rates will automatically revert to their prescribed levels a week after the one-month average Dubai crude price falls below USD 80 per barrel, or once the three-month suspension expires.
The DBCC and DOE were also directed to review the implementation of the tax suspension and submit reports to Congress. Based on their assessment, the DBCC may recommend its continuation, modification, extension or termination.
The DOE, Department of Finance, Bureau of Internal Revenue and Bureau of Customs were instructed to monitor existing LPG and kerosene inventories and ensure compliance with the order.
Oil companies will also be required to submit monthly data on the cost components of petroleum products covered by the suspension.
EO 125 takes effect immediately upon publication in the Official Gazette or a newspaper of general circulation.
The Official Gazette lists Executive Order issuances under the Office of the President.
