By Brian Campued
President Ferdinand R. Marcos Jr. has ordered a three-month suspension of the excise tax on liquefied petroleum gas (LPG) and kerosene, as part of the government’s efforts to mitigate the impact of rising fuel prices brought about by the conflicts in the Middle East.
Marcos Jr. signed the Executive Order (EO) No. 114 on Thursday after the Development Budget Coordination Committee (DBCC) recommended a full suspension of excise taxes on LPG, except when used as raw material for petrochemical products or for motive power, and kerosene, except when used as aviation fuel.
The Department of Energy (DOE) had also certified that the average Dubai crude oil price based on the Means of Platts Singapore (MOPS) reached $93.71 per barrel over the past 30 days.
This exceeds the $80 per barrel threshold set under Republic Act 12316.
“The suspension shall be subject to monthly review by the DBCC, which shall recommend to the President the continuation, modification, extension, or termination thereof,” the EO stated.
The excise tax shall automatically revert without the need for further issuance a week after the one-month average Dubai crude oil price based on MOPS falls below $80 per barrel, as certified by the DOE, or upon the expiration of the suspension period.
The DOE and the Department of Finance, through the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), are directed to conduct an inventory of existing stocks of LPG and kerosene and ensure compliance with EO 114.
“The BIR and the BOC shall likewise submit to Congress monthly information on the declared value and volume of petroleum products covered by this Order,” the order read.
During the suspended period, oil companies are likewise required to submit data on cost components of LPG and kerosene monthly. The DOE shall submit such information to the DBCC and Congress.
In a surprise press briefing on April 13, Marcos announced that P3.36 per kilogram would be trimmed for LPG, equivalent to around P36.96 per 11-kg cylinder.
Kerosene prices would also drop by P5.60 per liter.
Meanwhile, there is no recommendation from the DBCC for the suspension of excise taxes on diesel and gasoline as this “would not likely provide meaningful relief” amid consecutive oil price hikes in recent weeks.
The Department of Finance (DOF) warned that the government could incur up to P43.6 billion in revenue losses over three months if it expands the suspension of excise taxes by including diesel and gasoline.
-jpv
President Ferdinand R. Marcos Jr. issues Executive Order 114, suspending the excise taxes on LPG and kerosene to mitigate the impact of rising global oil prices. (Photo courtesy: Official Gazette of the Philippines)
President Ferdinand R. Marcos Jr. issues Executive Order 114, suspending the excise taxes on LPG and kerosene to mitigate the impact of rising global oil prices. (Photo courtesy: Official Gazette of the Philippines)
