The government is moving to ease the impact of rising fuel prices after Finance Secretary Frederick Go signed a resolution seeking the suspension of excise taxes on liquefied petroleum gas (LPG) and kerosene.
Go announced the move during the Department of Finance (DOF) budget hearing at the Senate after Sen. Christopher “Bong” Go renewed his call for fuel tax relief amid the ongoing conflict in the Middle East.
“Matagal ko nang pina-follow up; kanina lang po umabot sa akin kaya pinirmahan ko agad-agad,” Go said.
The proposed suspension covers LPG and kerosene but excludes gasoline and diesel.
Dubai crude breaches tax-relief threshold
The move follows the rise in Dubai crude prices beyond the threshold set under Republic Act 12316, which allows the President to suspend or reduce fuel excise taxes under certain conditions.
The law permits the measure for up to three months when the average Dubai crude price, based on the Mean of Platts Singapore (MOPS), reaches or exceeds $80 per barrel for one month.
The government previously suspended excise taxes on LPG and kerosene in April amid elevated fuel prices. The relief ended in July after the average Dubai crude price in June dropped below the required threshold.
Under the TRAIN Law, LPG is subject to an excise tax of P3 per kilogram, while kerosene carries a P5-per-liter tax.
Tax relief could cut household costs
If approved, the suspension would lower the taxes included in the prices of LPG and kerosene.
Go earlier said the measure could reduce LPG costs by P3.36 per kilogram, equivalent to nearly P37 for an 11-kilogram tank. Kerosene prices could also be reduced by P5.65 per liter.
The proposal is expected to provide some relief to households and other consumers affected by higher fuel prices.
Gasoline, diesel taxes to stay
The DOF is not recommending a similar suspension for gasoline and diesel, citing its potential impact on government revenues.
Go said removing the taxes on the two fuels could result in an estimated P12 billion monthly revenue loss.
Instead, the government plans to continue targeted subsidies and other assistance programs for sectors affected by rising fuel costs.
The proposed LPG and kerosene tax suspension will still require the necessary approval before it can take effect.
