Economist believes suspending petroleum excise tax to be felt fastest by poor

An economist on Saturday said that suspending the collection of excise tax on petroleum products would be felt the fastest by the poor in a bid to ease the inflationary impact of global oil price spikes amid the Middle East war.

“Ako, sa aking palagay, ‘yan ang pinakamabilis na puwedeng gawin ng pamahalaan — tanggalin ang excise tax sa mga produktong petrolyo. At ‘yan ay makatutulong na makababa doon sa kinakarga ng mga mamamayan sa transportasyon,” economist Emmanuel Leyco, fellow at the Centre for People Empowerment in Government, said in an interview on Super Radyo dzBB.

(In my opinion, suspending the excise tax on petroleum products is the fastest thing the government can do. And that will help lessen the burden on the public when it comes to transportation.)

The economist said that apart from transportation, petroleum products are also an input or logistics cost for agricultural products.

“Sa aking simpleng pag-iisip, palagay ko, kapag nabawasan ang presyo ng petrolyo eh major input ‘yan hindi lamang doon sa transportasyon ng mga mamamayan kundi roon sa logistics na nakakapagpataas ng presyo ng halaga ng mga input para sa kanilang mga produksyon,” Leyco said.

(In my simple analysis, I think if there is a decrease in the prices of petroleum products, that is a major input not only in the transportation of the public but also in the logistics that drive up the prices of inputs needed for production.)

The economist  earlier said that the wealthy are not the only ones who will benefit once the collection of fuel excise tax is suspended. 

Below is a list of the excise taxes imposed on manufactured oils and other fuels that have been in place since 2020, in line with the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law:

• Lubricating oils and greases - P10.00 per liter
• Processed gas - P10.00 per liter
• Waxes and petrolatum - P10.00 per kilogram
• Denatured alcohol - P10.00 per liter
• Naptha, regular gasoline, pyrolysis gasoline - P10.00 per liter
• Unleaded premium gasoline - P10.00 per liter
• Aviation turbojet fuel, aviation gas - P4.00 per liter
• Kerosene - P5.00 per liter
• Diesel fuel oil - P6.00 per liter
• Liquefied petroleum gas - P3.00 per kilogram
• Asphalts - P10.00 per kilogram
• Bunker fuel oil - P6.00 per kilogram
• Petroleum coke - P6.00 per metric ton

Retail prices could decrease by the amounts mentioned above if President Ferdinand Marcos Jr. completely suspends the excise taxes.

Early this month, Marcos suspended the collection of excise taxes on LPG and kerosene, a move aimed at easing the burden on households amid volatile global oil prices driven by tensions in the Middle East. —KG, GMA News