No Timetable for Fuel Tax Relief in Philippines Amid Price Surge

THE Philippine government has yet to set a timetable for deciding whether to cut or suspend fuel excise taxes even after oil prices breached the threshold allowing tax relief, as pump prices rose sharply for a third straight week. Diesel prices increased by P8.82 a liter on Tuesday, gasoline by P4.88 and kerosene by P6.47, according to the Department of Energy (DoE). The increases brought the cumulative rise over the past three weeks to P18.31 a liter for diesel, P15.25 for gasoline and P16.67 for kerosene. Palace Press Officer Clarissa A. Castro said the economic team was close to completing its recommendation on whether to suspend or reduce fuel excise taxes and expected to submit it to President Ferdinand R. Marcos, Jr. this week. She did not give a timetable for a decision. “If it is really necessary, the President will act on it immediately,” Ms. Castro told a news briefing in Filipino. The DoE on Sept. 15 certified that Dubai crude averaged $99.41 a barrel from Aug. 13 to Sept. 11, exceeding the $80 threshold required under Republic Act No. 12316 for the government to consider temporarily cutting or suspending fuel excise taxes. The certification has been submitted to the Development Budget Coordination Committee, which must make a recommendation before the President can exercise the authority. Under the law, the President may reduce or suspend excise taxes on specific petroleum products for as long as three months at a time once the one-month average Dubai crude price reaches at least $80 a barrel. The authority may be exercised for an aggregate period of up to one year and expires at the end of 2028. Mr. Marcos exercised the authority in April, suspending excise taxes on liquefied petroleum gas, subject to certain exceptions, and kerosene, excluding aviation fuel, for three months. Dubai crude had averaged $93.71 a barrel over the past 30 days. The latest pump-price increases have also renewed pressure for higher public transport fares. Ms. Castro said a possible fare increase remained under discussion as the government sought to balance the needs of transport operators with the impact on commuters. “That matter is still being discussed,” she said. “It would be a heavy burden to implement everything all at once.” Transportation Secretary Giovanni Z. Lopez views a fare increase as a last resort, Ms. Castro said. “We hope that a fare hike remains our last resort,” she said, citing Mr. Lopez. “The DoTr (Department of Transportation) continues to implement initiatives to mitigate the impact of rising fuel prices, such as fuel discounts and toll-free travel for buses.” The government is also considering targeted assistance for transport workers through the Department of Social Welfare and Development’s Assistance to Individuals in Crisis Situations program, she added. The government earlier doubled fuel discounts for traditional jeepney and UV Express drivers to P20 a liter, capped at 150 liters a week. Provincial buses have also been granted free passage on several Luzon expressways, while some public transport terminal fees have been waived. Transport group Pagkakaisa ng mga Samahan ng Tsuper at Operator Nationwide said it would proceed with a two-day nationwide strike on Sept. 29 and 30 to protest spiraling fuel prices. The group is seeking higher jeepney fares, the removal of value-added and excise taxes on fuel and basic goods, lower pump prices and the repeal of the Oil Deregulation law. Ms. Castro said the government would not prevent the group from holding it. Energy Secretary Sharon S. Garin said fuel prices were likely to remain above levels seen before the latest Middle East conflict through the end of the year unless tensions ease. Given currency exchange rates and the Middle East war, the DoE does not expect oil prices to return to pre-war levels this year, she said on Monday, adding that prices are likely to remain high at least until Christmas unless a peace deal is reached. — Erika Mae P. Sinaking