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President Ferdinand Marcos Jr. on April 16 signed the order suspending for three months the imposition of excise taxes on liquefied petroleum gas and kerosene to mitigate the impact of rising global oil prices
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Executive Order No. 114 suspends the excise taxes on LPG, except when used as raw material for production of petrochemical products or used for motive power, aand kerosene, except when used as aviation fuel
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EO No. 114 provides for the automatic reversion of excise tax rates, a week after the one-month average Dubai crude oil price based on MOPS falls below $80 per barrel
President Ferdinand Marcos Jr. on April 16 signed the order suspending for three months the imposition of excise taxes on liquefied petroleum gas (LPG) and kerosene to mitigate the impact of rising global oil prices.
Executive Order (EO) No. 114, dated April 17, formalizes Marcos’ pronouncement on April 14 on the suspension of excise taxes on LPG, except when used as raw material for production of petrochemical products or used for motive power, and kerosene, except when used as aviation fuel.
READ: LPG, kerosene excise tax lifted; gov’t eyes cut in duties for imported agri goods
The order will be in effect for three months.
EO No. 114 was issued after the Department of Energy (DOE) certified that the average Dubai crude oil price based on Mean of Platts Singapore (MOPS) reached US$93.71 per barrel over the past 30 days, exceeding the $80 threshold set under Republic Act (RA) No. 12316.
RA No. 12316, signed last March, granted the President the emergency power to, upon recommendation of the Development Budget Coordination Committee (DBCC) and in coordination with the Energy Secretary, to suspend or reduce fuel excise taxes if Dubai crude oil price reaches or exceeds $80 per barrel for one month.
Under EO No. 114, the suspension will be subject to monthly review by the DBCC, which will recommend the continuation, modification, extension, or termination thereof.
EO No. 114 provides for the automatic reversion of excise tax rates, 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 and the Bureau of Customs, are directed to conduct an inventory of existing stocks of LPG and kerosene and ensure compliance with the latest directive.
Oil companies are required to submit regular data on cost components of LPG and kerosene on a monthly basis.
LPG and kerosene are the two commonly used cooking fuel in the county.
The reduction is equivalent to P3.36 per kilogram of LPG, or almost P37 for every 12-kg tank, and P5.60 for every liter of kerosene.
The 12% value-added tax (VAT), however, remains in effect for LPG and kerosene along with other goods.
Marcos earlier said lifting or even reducing VAT on fuel products will compromise government revenues that are intended for assistance programs.
Also last March, Marcos signed EO No. 110, declaring a state of national energy emergency in light of the ongoing conflict in the Middle East.
The order authorizes Marcos to declare a critically low energy supply or imminent danger, and to implement the fuel and energy allocation plan and other energy conservation measures.
The EO also set up the Unified Package for Livelihoods, Industry, Food, and Transport (UPLIFT) program as the government’s coordinated, whole-of-government response framework.— Roumina Pablo
