Philippines: Fuel Tax Suspension Looms as Oil Prices Breach $80 Threshold

MANILA, Philippines — The Department of Energy has formally certified that Dubai crude breached the $80-per-barrel threshold that allows President Ferdinand Marcos Jr. to suspend or reduce excise taxes on petroleum products, clearing a key legal requirement for another round of fuel tax relief. Energy Secretary Sharon Garin said Tuesday, Sept. 15, that the 30-day average price of Dubai crude reached $99.41 per barrel from Aug. 13 to Sept. 11, well above the trigger set under Republic Act No. 12316. "Lampas na po ito sa threshold na itinakda ng batas, kaya naman opisyal na naming na-certify ito at na-transmit sa DBCC para sa kanilang konsiderasyon," Garin said. ("This is already beyond the threshold set by law, so we have officially certified it and transmitted it to the DBCC for its consideration.") The certification does not automatically suspend fuel taxes. Under RA 12316, the President may suspend or reduce excise taxes upon the recommendation of the Development Budget Coordination Committee, in coordination with the energy secretary. The law allows the relief to cover specific petroleum products and last for up to three months at a time. The Department of Finance said last week that it was awaiting the DOE certification before proposing a full suspension of excise taxes on liquefied petroleum gas and kerosene. The LPG Marketers Association has urged the government to go further and include gasoline and diesel as fuel prices surge amid continuing tensions in the Middle East. The government invoked the same mechanism in April after the DOE certified that the 30-day Dubai crude average had reached $93.71 per barrel. Marcos subsequently suspended excise taxes on LPG and kerosene under Executive Order No. 114. The taxes were restored in July after the DOE certified that the monthly average had fallen to $79.45 per barrel, below the statutory trigger. RA 12316, signed in March, authorizes the President to fully suspend or partially reduce excise taxes on selected petroleum products whenever the one-month average Dubai crude price reaches or exceeds $80 per barrel. "This is a step forward in protecting our motorists, and we'll continue pushing for consumer relief amid the Middle East crisis in coordination with economic managers," Garin said. The certification comes after two consecutive weeks of steep pump price increases. Gasoline prices rose by P5.68 per liter Tuesday, diesel by P4.31 and kerosene by P4.62. Combined with the previous week's increases, gasoline has climbed by P10.37 per liter in two weeks, diesel by P9.49 and kerosene by P10.20. Some fuel products are now selling above P100 per liter at certain stations. Oil prices have risen amid escalating Middle East tensions and concerns over supply routes, including the Strait of Hormuz, a critical passage for global oil shipments. Information Source: Philstar Business