Marcos signs law granting emergency powers to suspend fuel excise tax

President Ferdinand Marcos Jr. on Wednesday signed into law the measure giving him emergency power to suspend or reduce the excise tax rate on fuel. 

“The President may, upon the recommendation of the Development Budget Coordination Committee (DBCC), in coordination with the Secretary of Energy, suspend the imposition of or reduce the excise taxes on fuel under this Section when the average Dubai crude oil price based on Mean of Platts Singapore (MOPS) reaches or exceeds Eighty US dollars (USD 80) per barrel for one (1) month immediately preceeding the issuance of the suspension or reduction order,” the Republic Act No. 12316 read. 

The newly enacted law provides that any suspension or reduction on petroleum products shall be effective 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 measure stated. 

The law also stated that any suspension or reduction may be applied to specific petroleum products, and can be implemented as a full suspension or partial reduction of the applicable excise tax rates. 

The excise tax rates will automatically revert to their original levels without requiring further executive or legislative action upon the occurrence of either: “One (1) week after the one (1)-month average of Dubai crude oil price based on MOPS fall below Eighty US dollars (USD 80) per barrel as duly certified by the Department of Energy (DOE);” or after three months of the implementation. 

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

“The report shall include a recommendation on whether the suspension or reduction of excise taxes should be maintained, modified, or lifted, and shall form part of the basis for any continued suspension or reduction,” the law read. 

Further, oil companies are required to submit monthly information to the DOE regarding the cost components of the petroleum products they sell during the suspension period

The Congress transmitted to the Office of the President on Tuesday the enrolled bill.

Data from the DOE showed that diesel prices are seen to spike to as high as more than P130 per liter while gasoline may go up past P100 a liter for March 24 to 30 as the series of mega oil price hikes due to the Middle East conflict enters its third week. —NB, GMA Integrated News