Palace: Fuel excise tax reduction, suspension 'under review'

A day after President Ferdinand Marcos Jr. signed into law the measure allowing the suspension or reduction of excise tax on oil, Malacañang said the exact reduction rate is still under review.

At Thursday’s press briefing, Palace Press Officer Undersecretary Claire Castro was asked whether a computation had already been made on how much the excise tax on fuel products would be reduced—or if it would be fully suspended.

“Sa ngayon, nakausap po natin si (Energy) Secretary Sharon Garin at ito ay under review sa ngayon dahil paiba-iba nga po ang presyo ng produkto ng petrolyo, so under review po siya,” Castro said.

(At present, we’ve spoken with Energy Secretary Sharon Garin, and this is under review because fuel prices are fluid.)

Marcos signed the law granting him emergency powers to suspend or reduce the excise tax rate on fuel.

Republic Act No. 12316 states: “The President may, upon the recommendation of the Development Budget Coordination Committee (DBCC) and in coordination with the Secretary of Energy, suspend the imposition of or reduce the excise taxes on fuel..." 

According to the new law, this may be done "when the average Dubai crude oil price, based on the Mean of Platts Singapore (MOPS), reaches or exceeds U$80 per barrel for one month immediately preceding the issuance of the suspension or reduction order.”

RA 12316 specifies that any suspension or reduction shall last for a period not exceeding three months.

“Provided, the power of the President to temporarily suspend or reduce the excise tax on petroleum products granted under this Section shall be exercised only until December 31, 2028,” the law adds.

Excise tax rates will automatically revert to their original levels without further executive or legislative action if either of the following occurs:

• One week after the one-month average of Dubai crude oil prices (based on MOPS) falls below US$80 per barrel, as certified by the Department of Energy; or
• After three months of implementation.

Within 15 days of issuing a suspension order, and monthly thereafter, the President—through the DBCC and in coordination with the DOE—must submit a report to Congress detailing the factual basis and policy goals for the suspension or reduction, estimated foregone revenues, expected impact on inflation and fuel prices, and a cost-benefit analysis.

Under the law, oil companies are required to submit monthly data to the DOE on the cost components of the petroleum products they sell during the suspension period.—MCG, GMA Integrated News