Gov’t officially suspends excise tax on LPG, kerosene

MANILA, Philippines — President Ferdinand Marcos Jr. on Friday issued Executive Order No. 125, which temporarily suspended the excise on liquefied petroleum gas (LPG) and kerosene to ease the impact of surging fuel prices on consumers.

“The excise taxes on LPG, except when used as raw material for the production of petrochemical products or used for motive power and kerosene, except when used as aviation fuel, are hereby fully suspended,” part of the order read.

The Development Budget Coordination Committee (DBCC), in coordination with the Department of Energy (DOE), was directed to conduct a monthly review of the implementation of the EO and submit a report to the Congress.

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The DBCC report will serve as the basis for the continuation, modification, extension or termination of the suspension of excise.

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READ: Go signs reso to remove LPG, kerosene excise

“The DOE and the Department of Finance, through the Bureau of Internal Revenue and the Bureau of Customs, are directed to conduct an inventory of existing stocks of LPG and kerosene as of the effectivity of this order,” Marcos said in his order.

In March, he signed Republic Act No. 12316, which allows the president to suspend or reduce fuel excise if Dubai crude oil price reaches or exceeds $80 per barrel for one month. The move was taken after tensions rose in the Middle East following the attack launched by the United States and Israel on Iran.

The tax suspension was first allowed under EO No. 114 which Marcos signed in April.

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The DOE certified on Sept. 11 that the threshold had again been breached.

DBCC recommendation

Global oil prices have surged anew past $100 a barrel, with the latest data showing that Dubai crude prices reached as high as $118.84 a barrel on Sept. 15, amid renewed escalating tensions in the Middle East.

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This prompted the DBCC, through Resolution No. 2026-11, to recommend the full suspension of excise tax on LPG, with certain exceptions.

A full suspension of excise will lower the price of an 11-kilogram LPG tank by P37, and slash P5.65 from the price of kerosene per liter.

The DBCC’s decision to suspend taxes only on LPG and kerosene was based on the view that these products are more heavily used by poorer households, making the tax relief more targeted toward vulnerable consumers.

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The excise on LPG and kerosene shall automatically be reimposed on either one of two conditions, whichever comes first: one week after the one-month average Dubai crude oil price based on the Mean of Platts Singapore falls below $80 per barrel, as certified by the DOE, or three months after the effectivity of the order. /das