During the last Palace press briefing on Friday, Castro said the Development Budget Coordination Committee (DBCC) has not yet released any recommendation on the fate of the excise tax.
At the same briefing, attended by Energy Secretary Sharon Garin, the government is making the excise tax cut to ease or lessen the impact of the ongoing Middle East crisis on the country’s logistics and transportation, which are shouldering the brunt of big-time oil price hikes.
“Any shaving of the price will help, whether it’s small or big,” Garin said.
Last month, Marcos signed into law Republic Act 12316, a measure authorizing the suspension or reduction of excise taxes on petroleum products once global oil prices reach a set threshold, providing the government with a key tool to cushion the impact of rising fuel costs on the economy.
The law allows the President, upon recommendation of the DBCC and in coordination with the Energy Secretary, to suspend or reduce fuel excise taxes if the Dubai crude oil price reaches or exceeds $80 per barrel for one month.
The Dubai crude is currently at $100.75 per barrel.
Further, the law states that any suspension or reduction of fuel excise taxes can only last up to three months, but not more than one year in total, and taxes will automatically return to their original rates either one week after the one-month average Dubai crude oil price drops below $80 per barrel, as certified by the Department of Energy (DoE), or after three months — whichever comes first.
“The power of the President to temporarily suspend or reduce the excise tax on petroleum products granted under this Section shall be exercised only until December 31, 2028,” the law stated.
Moreover, the signed law mandates the Executive Branch to report to Congress the basis and goals for reducing or suspending excise taxes, including expected revenue losses, effects on households, impact on inflation and fuel prices, cost-benefit analysis, and any possible market distortions or unintended consequences.
“The report shall include a recommendation on whether the suspension or reduction of excise taxes should be maintained, modified, or lifted, and shall form part of the basis for any continued suspension or reduction,” the law read.
Oil companies will also be required to submit to the DoE monthly data on the cost components of the price of petroleum products sold.
