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DOE seeks power to suspend oil excise tax

The Department of Energy (DOE) is seeking Congress' help to grant the agency an authority to suspend excise tax on fuel amid the continued rise in oil prices.

In an interview on ANC on Wednesday, Energy Secretary Alfonso Cusi said his department is discussing with the Department of Finance (DOF) “the possibility to suspend excise tax for the meantime.”

However, Cusi said this cannot be done through an executive order by the President, thus a new legislation is needed.

“Just like when Bayanihan law was implemented, nagkaroon ng provision na if the price of oil will reach $80 per barrel puwede ma-suspend ang excise tax [there was a provision that if price of oil reaches $80 per barrel we can suspend excise tax], but the period has already lapsed,” he said.

Cusi estimated that suspending excise tax can lower pump prices by around P8 to P10 per liter.

The Tax Reform for Acceleration and Inclusion (TRAIN) law increased excise tax on fuel in three tranches from 2018 to 2020, bringing the total duties to P10 per liter for gasoline, P6 per liter for diesel, and P5 per liter for kerosene at present.

Similarly, the TRAIN law has a provision of suspending the scheduled increase in the excise tax when the average Dubai crude oil for three months prior to the scheduled increase reaches $80 per barrel.

This provision, however, has already lapsed following the effectivity of the last tranche of excise tax increase in 2020.

With this, Cusi said the DOE is seeking to amend the Oil Deregulation Law, which will include an authority for the department to suspend fuel excise tax. 

“What we would like in the law, we want it to be part of the law, the authority to suspend it into certain abnormal conditions,” he said.

As to how long the suspension of fuel excise tax can be implemented, the Energy chief said this has to be “debated, deliberated, and discussed.”

“We need a law to do that,” Cusi emphasized.

The DOE is also pushing for the unbundling of oil prices, which he said would result in greater market transparency by establishing the trends in the prices of oil and finished petroleum products.

Cusi said the government is also studying how to reimplement its subsidy program for public transport drivers to alleviate the burden of higher fuel costs.

Executive meeting

Meanwhile, an executive meeting was held before the House Committee on Transportation between concerned agencies to discuss the oil price increase and the government support for drivers of public utility vehicles.

Amid the price increase of fuel products, jeepney drivers had called for a fare hike of at least P3.

Samar Representative and panel chairman Edgar Sarmiento told reporters that it was decided during the meeting to put on hold the fare increase for the meantime.

"May relief na kaagad na binanggit kanina ang DOE at DOTr (Department of Transportation) na pumabor naman ang hanay ng jeepney and they will be putting on hold muna 'yung increase. That's the bottomline," Sarmiento said.

(The DOE and the DOTr mentioned some relief and the group of jeepney drivers agreed and they will be putting on hold the fare increase.)

Sarmiento said cash subsidies would also be given not just to operators but also to jeepney drivers and franchise holders. He said the amount would still be determined by the DOTr and the DOE.

Cusi has welcomed the oil firms' willingness to grant discounts of P1 to P3 per liter to public transport drivers.  —with Anna Felicia Bajo/KBK, GMA News