DOE backs measure to let Marcos suspend excise taxes on oil

Department of Energy Secretary Sharon Garin on Monday expressed support for a proposed measure that would allow President Ferdinand Marcos, Jr. to suspend excise taxes on oil, saying a two-month suspension could lower diesel prices by as much as P6 per liter.

Garin made the remarks during a briefing on calls to suspend excise taxes amid the ongoing conflict between the United States, Israel, and Iran, which has escalated across Gulf nations from which the Philippines imports 98% of its crude oil.

“I’m not confident to say that there won’t be any more increases after this week. We’re hoping, as mentioned by the President, that the bill authorizing the President to suspend the excise tax will be passed because diesel is the most sensitive, especially for the riding public," Garin said.

"Public utility vehicle consumption accounts for 65% of diesel use. That’s P6 less per liter with the suspension,” she added.

Garin said that the suspension may last from one to six months, depending on the committee’s decision.

“This could be a limited authority for the President. Six pesos is substantial. This is not an outright suspension but just an authority so economic managers can assess the impact,” she said.

In a separate interview, House Ways and Means Committee Chairperson Miro Quimbo (Marikina City) said the proposed bills empowering the President to suspend excise taxes will be deliberated and could be approved as early as Wednesday, March 11.

“Excise taxes account for 10 to 15% of fuel prices. Malaking bagay ito (This amount is significant). We hope to finish this by Wednesday because if we cannot, we will go on session break next week and the measure won’t be passed,” he said.

Quimbo also emphasized the urgency of giving the President this authority.

“We are counting on the Palace to certify this as urgent so we can finish in time. By Monday next week, we can approve it on third and final reading," he said.

Quimbo warned that if Congress fails to pass the measure within the next two months, the President would lack the means to address rising oil prices amid the Middle East crisis.

"Congress will not implement the suspension. We are giving that power to the President because he is in the best position to act, while we will set limits on the duration and scope of the suspension,” he said.

He said the law granting such emergency powers is necessary even beyond the current US-Israel-Iran conflict because the Oil Deregulation Law has failed to protect consumers.

According to Quimbo, emergency powers are needed because the Oil Deregulation Law "presupposes a free and competitive market."

"But competition is not vibrant—oil companies raise prices simultaneously. They are required to maintain a 30-day inventory, but when global prices rise, they adjust immediately," he said.

Quimbo pointed out that when prices fall, oil companies do not immediately pass the reduction on to consumers.

"The law needs reevaluation, and the government should have the authority to review oil prices,” he said.—MCG, GMA Integrated News