No meaningful relief from gas, diesel tax cuts – DOF

Suspending excise taxes on diesel and gasoline would likely not provide any “meaningful relief” for Filipino motorists as the Middle East conflict continues to push pump prices higher, according to Finance Secretary Frederick Go.

In a Tuesday statement, Go said the Development Budget Coordination Committee (DBCC)—which played a pivotal role in the President’s move on Monday to suspend excise taxes on kerosene and liquefied petroleum gas (LPG) imports—determined that any price reduction from suspending excise taxes on gasoline and diesel would be minimal and largely driven by market factors.

“Following a careful and thorough review of policy options by the DBCC, the Philippine government is taking a balanced and fiscally responsible approach to address both the immediate and long-term challenges arising from the ongoing conflict affecting the Middle East,” he said.

“[T]he DBCC has determined that suspending excise taxes on diesel and gasoline would not likely provide meaningful relief, as any reduction in retail pump prices would be marginal and largely offset by prevailing market dynamics,” Go added.

President Ferdinand R. Marcos Jr. exercised his temporary authority to suspend taxes on kerosene and LPG imports, granted through Executive Order No. 110. Signed on 25 March, the order also declared a state of national “energy emergency” for one year as the Middle East conflict continues.

On Tuesday, Go said Filipinos could save around P36.96 per 11-kg cylinder of LPG and P5.56 per liter of kerosene. He noted that 48 percent of total kerosene consumption is attributed to the bottom 30 percent of households, while roughly 55.7 percent of LPG users come from the bottom 70 percent.

“This means the benefits extend beyond the poorest households to also support middle-income families. For these families, every peso saved on fuel costs means more resources for food, education, and healthcare,” he added.

Government officials have called for the suspension or reduction of excise taxes on gasoline and diesel to preserve Filipino purchasing power, with pump prices remaining in the triple-digit-per-liter range in Metro Manila. However, some lawmakers have pushed back against the proposal, with the Department of Finance earlier projecting around P136 billion in foregone government revenues if petroleum taxes are suspended.

Economy, Planning, and Development Undersecretary Rosmarie Edillon said a potential suspension of excise taxes on gasoline could result in a rollback of about P10 per liter, while diesel prices could fall by around P6 per liter.

Meanwhile, the President said at a Monday press conference in Malacañang that value-added tax (VAT) on petroleum products will remain in place for now, citing higher government revenues due to rising oil prices.

“Because of rising crude prices, importations at current VAT rates generate additional funds. If we remove the VAT on petroleum products, it will mainly benefit the oil market. What we need is funding that supports the entire society,” he said.

“We can’t focus only on petroleum. People are asking why only the transport workers are being helped. What about other sectors? We also need to take care of everyone’s welfare,” Marcos added.

The Philippine government has already disbursed P125.2 billion in response to economic pressures arising from the ongoing Middle East conflict. This includes fuel subsidies, financial assistance, and logistics support for the agriculture sector, as well as fuel subsidies, cash aid, and fee reductions for the transport sector.

The funds are also being used to secure oil and electricity supply for the energy sector, as well as to support repatriation and reintegration efforts for overseas Filipino workers.