Philippines Suspends Excise Taxes on LPG, Kerosene Amid Soaring Fuel Costs

MANILA, Philippines — The Philippines has temporarily suspended excise duties on petroleum products essential for cooking, the presidential palace announced on Friday, as the nation grapples with escalating fuel costs exacerbated by the Middle East war. The temporary suspension, detailed in an executive order released to the media, covers liquefied petroleum gas (LPG), the country's primary fuel for cooking, and kerosene. The order states, "The excise taxes on LPG, except when used as a raw material for production of petrochemical products or used for motive power, and kerosene, except when used as aviation fuel, are hereby fully suspended." This tax reduction translates to a saving of approximately three pesos (about five US cents) per kilogram of LPG. The excise cut follows a threat by bus operators to initiate a two-day nationwide transport strike next week, demanding government approval to raise fares, which are subject to state regulation. In contrast to neighbors like Indonesia, Malaysia, and Thailand, fuel prices in the Philippines are unregulated, forcing local transport companies to absorb market fluctuations. President Ferdinand Marcos Jr. indicated that the tax would automatically revert after three months, or a week after the 30-day average Dubai crude oil price drops below $80 per barrel. The average crude oil price for the 30 days ending September 11 had reached $99.41. The import-dependent Philippines declared a national energy emergency in March and has been expanding its search for fuel supplies, including oil from Russia. The ongoing conflict in the Middle East, coupled with high inflation, has tempered the Philippines' economic growth in the first half of the year to 2.6%, falling short of government targets.