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Executive Order No. 125 fully suspends excise taxes on LPG (except for petrochemical or motive-power use) and kerosene (except aviation fuel)
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Move follows Department of Energy certification that Dubai crude averaged US$94.41 per barrel, well above the US$80 threshold that triggers the relief
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Suspension takes effect immediately upon publication and lasts up to three months, subject to monthly review
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Gasoline and diesel are excluded from the relief
President Ferdinand R. Marcos Jr. signed Executive Order (EO) No. 125 on September 25, 2026, ordering the temporary suspension of excise taxes on liquefied petroleum gas (LPG) and kerosene as global oil prices continue to climb — the second such suspension this year.
The order was issued under Republic Act No. 12316, which allows the President, on recommendation of the Development Budget Coordination Committee (DBCC) and in coordination with the Department of Energy (DOE), to suspend or reduce excise taxes on petroleum products once the one-month average Dubai crude price based on the Mean of Platts Singapore (MOPS) hits or exceeds US$80 per barrel. The DOE certified on September 11 that the 30-day average had reached US$94.41 per barrel, prompting the DBCC, through Resolution No. 2026-11, to recommend the full suspension.
Under Section 1 of EO No. 125, excise taxes are fully suspended on LPG, except when used as a raw material for petrochemical production or for motive power, and on kerosene, except when used as aviation fuel. Gasoline and diesel remain outside the relief.
Finance Secretary Frederick Go has said the tax break was kept off gasoline and diesel because extending it to those fuels would disproportionately benefit higher-income consumers who use more of them.
For trucking, warehousing, and other operations that run on LPG-fueled equipment or forklifts, the suspension offers near-term cost relief, though the diesel and gasoline exclusion means line-haul trucking costs remain unaffected by this particular order. Businesses relying on LPG for backup power or material handling should expect the relief to flow through fairly quickly, since the order takes effect immediately upon publication in the Official Gazette or a newspaper of general circulation.
The relief is explicitly temporary and reversible. EO No. 125 provides for automatic reversion to the regular excise tax rates under Section 148 of the National Internal Revenue Code, without need for another executive order, upon whichever comes first: one week after the Dubai crude average falls back below US$80 per barrel, or three months after the EO takes effect. Within 15 days of issuance and monthly thereafter, the DBCC and DOE must review the suspension’s implementation and report to Congress, which may lead to its continuation, modification, extension, or termination — meaning stakeholders should treat the relief as a rolling, conditions-based measure rather than a fixed three-month window.
Compliance and monitoring requirements
EO No. 125 also directs the DOE and the Department of Finance, through the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC), to inventory existing LPG and kerosene stocks as of the order’s effectivity, with the BIR and BOC required to submit monthly data on the declared value and volume of covered products. Oil companies must submit monthly cost-component data to the DOE, which will relay the information to the DBCC and Congress — reporting obligations that fuel importers, distributors, and bulk LPG buyers should expect to factor into their compliance planning.
The measure echoes EO No. 114, signed in April 2026 under the same legal authority, which similarly suspended excise taxes on LPG and kerosene amid an earlier spike in global crude prices.
