Marcos suspends excise taxes on LPG, kerosene

MANILA, April 14 ------ President Ferdinand Marcos Jr. announced the suspension of excise taxes on liquefied petroleum gas (LPG) and kerosene.

This, about half a month after Congress passed a law granting the Chief Executive powers to tinker with these duties on petroleum products. The temporary removal of the P3.36 per kilo excise tax on LPG is expected to reduce the price of LPG by almost P37 for every 11-kilogram tank, while the P5.60 per liter tax on kerosene will also be suspended, the President said in a Palace press conference. When asked why the excise taxes on diesel and gasoline were retained, Marcos said: “That's to be discussed tomorrow.”

“It is the balance we are trying to achieve. Kung masyadong babain ang presyo ng langis, sasabihin ng mnga importer, hindi na kami kikita, hindi na kami magiimport, masisira naman ang supply natin,” he said. “Poprotektahan natin ang mga consumer, ang mga magsasaka, at ng industriya. ‘Yan ang ating hinahanap na balanse… As you know, the economy is a complicated system kaya’t kung may gagawin ka sa isang bahagi, may epekto ‘yun sa kabilang bahagi,” he said.

Under Republic Act No. 12316, the President may only reduce or suspend excise taxes on petroleum products upon the recommendation of the Development Budget Coordination Committee (DBCC) and after “the average Dubai crude oil price… reaches or exceeds $80 per barrel for one month.”

The excise tax shall “revert automatically” to its original rates “without need for further legislative or executive action” one week after the one month average of Dubai crude oil prices fall below $80 per barrel or after 3 months, whichever comes first, according to the law signed in March 2026. Meantime, the President said that the administration is not keen on reducing or suspending the 12 percent value added tax (VAT) on petroleum products, noting that the government has been getting “a windfall profit from” the VAT due to the higher prices of oil. “If we take away the VAT on petroleum products, it will only help the petroleum market. What we need is funding to help the entire society,” he said. “With the additional funding that we will get from the VAT collections, ‘yun ang gagamitin ngayon natin to provide. That fund will not exist if we remove the VAT on petroleum products alone,” he added.

While this is the administration’s current stance, the President said that they are still open to review all proposals. “We will still examine it... If the time comes that it really calls for the – if the time will come that VAT should be brought down for whatever products, then we will certainly study it very well,” he said. “Right now, the balance, the cost-benefit analysis between the VAT collections and the benefit to people, to ordinary people, still favors that we collect VAT… to provide all of those subsidies that we have been able now to provide, that we have to provide now to people to normalize people's lives.” he added.

Malacañang earlier said that Marcos will need a fresh enabling law from Congress should he adjust VAT rates on petroleum products.

Source: news.abs-cbn.com