Philippines Considers Full Suspension of LPG, Kerosene Excise Taxes Amid Oil Price Surge

The Department of Finance (DOF) is awaiting certification from the Department of Energy (DOE) that Dubai crude oil prices have breached the $80-per-barrel threshold, a prerequisite for proposing the full suspension of excise taxes on liquefied petroleum gas (LPG) and kerosene to the President. According to the DOF, Secretary Frederick Go is prepared to immediately propose to the Development Budget Coordination Committee (DBCC) the suspension of 100% of the excise taxes on LPG and kerosene for the President’s approval once DOE confirms the breach. The Tax Reform for Acceleration and Inclusion (TRAIN) Law currently imposes excise taxes of P3.00 per kilogram for LPG and P5.00 per liter for kerosene. President Ferdinand “Bongbong” Marcos Jr. signed Republic Act 12316 into law in March, granting him emergency powers to suspend or reduce fuel excise tax rates. Under this measure, the suspension or reduction can be implemented for up to three months if the average price of Dubai crude oil—based on the Mean of Platts Singapore (MOPS)—reaches or exceeds $80 per barrel for one month. Recent international market developments have seen oil prices surge, with West Texas Intermediate (WTI) rising above $100 per barrel and Brent crude jumping over 6% past $107 a barrel, its highest level since May. This surge was partly attributed to the capture of the Red Sea port city of Mocha by Yemen's Houthis. The proposed measure aims to mitigate the impact of global oil price increases on domestic consumer prices and alleviate the financial burden on households. LPG is widely used for cooking by many Filipino families, while kerosene is used for lighting and cooking in some areas, as well as in agriculture. Price hikes in these commodities significantly strain household budgets.