DOE: Excise tax suspension won’t bring immediate fuel price relief

Despite growing calls to cut taxes to ease soaring fuel costs, the Department of Energy (DOE) said suspending excise taxes would not bring immediate relief because all fuel currently in the country has already been taxed.

Speaking to reporters on Tuesday, Energy Secretary Sharon Garin said the proposal was discussed in Tuesday’s meeting with the President but remains undecided pending consultation with the Development Budget Coordination Committee. 

“The decision was not made yet at that time,” she said, adding that economic managers “would be in a better position to answer that.”

She stressed that excise taxes are paid upfront when fuel enters the Philippines. 

“It is charged upon entry into the country, meaning upon importation. So once you’ve imported it, you’ve already paid,” Garin said. “Everything we are selling now — which covers 50 days of supply — already has the excise tax paid.”

Because current stocks are fully taxed, any suspension announced now will take time to reach consumers. 

“Even if you announce a suspension of the excise tax today, it still won’t be felt yet because it has already been paid,” she said. “We’re making sure we have enough supply to maintain energy security.”

Garin said the next batches of fuel imports are expected to arrive by mid- or late April, which is when any suspension of excise taxes could begin to show up in pump prices. She added that the timing of these shipments will determine how soon consumers might feel any tax relief.

Suspending fuel excise taxes, now being considered amid surging global oil prices, could cost the government about P200 billion in lost revenues, with the figure potentially exceeding P320 billion if value-added tax is also lifted. 

Lawmakers warn that while the measure may provide temporary relief from rising pump prices, it carries significant economic risks: reduced tax collections could weaken government spending, drag down economic growth, and ultimately affect Filipinos more broadly in the long run.

Under the new law allowing the President to suspend or reduce excise taxes once Dubai crude averages above $80 per barrel, any relief would take effect only after a formal assessment by economic managers. 

The suspension would also be temporary, automatically reverting once global prices fall or after three months.