PHILIPPINES: President Ferdinand Marcos Jr. has signed a new law allowing the government to temporarily suspend or reduce fuel excise tax when global oil prices rise sharply, GMA News Online reported.
Contents
What the New Law Allows
Under Republic Act No. 12316 , the President can lower or stop fuel excise tax if global oil prices hit a certain level.
This can happen when:
- Dubai crude oil price reaches USD 80 per barrel
- The price stays at that level for at least one month
The decision will be based on recommendations from the Development Budget Coordination Committee (DBCC) and the Department of Energy (DOE).
How Long Will the Tax Cut Last?
The tax suspension is not permanent. The law sets clear limits:
- Maximum duration: 3 months
- It can end earlier if oil prices go down
- Taxes will automatically return to normal after the period
This rule is in place until December 31, 2028.
Why This Law Was Passed
The move comes as fuel prices continue to rise due to the ongoing Middle East conflict.
According to DOE data:
- Diesel prices may go beyond ₱130 per liter
- Gasoline may exceed ₱100 per liter
These increases affect transport, food prices, and daily expenses.
The law aims to:
- Ease the burden on Filipino families
- Help control inflation
- Stabilize fuel prices during global crises
What Oil Companies Must Do
During the tax suspension period, oil companies are required to:
- Submit monthly reports to the DOE
- Show breakdown of fuel costs
This helps ensure transparency and fair pricing.
Government Monitoring and Reporting
The government must also stay accountable.
Within 15 days after the suspension starts, and every month after:
- A report must be sent to Congress
- It must explain:
- Why the tax was reduced
- Impact on fuel prices and inflation
- Estimated revenue loss
This ensures the policy is reviewed and adjusted if needed.