$80 oil trigger breached, opening door to fuel tax suspension
Oil is well past $80. Now economic managers must decide on tax relief
Manila, Philippines - The Department of Energy (DOE) has officially confirmed that Dubai crude oil has surpassed the $80-per-barrel threshold, enabling President Ferdinand Marcos Jr. to suspend or decrease excise taxes on petroleum products. This crucial legal prerequisite was met for the third time, according to Energy Secretary Sharon Garin on September 15th.
Garin reported that Dubai crude's 30-day average price climbed to $99.41 per barrel from August 13th to September 11th, significantly surpassing the mandated threshold outlined in Republic Act No. 12316. The certification was subsequently transmitted to the Department of Budget and Management (DBCC) for evaluation.
However, the certification itself does not instantly suspend fuel taxes. Under RA 12316, the President may choose to suspend or reduce excise taxes upon the recommendation from the Development Budget Coordination Committee (DBCC), working closely with Garin. The law allows for relief measures, covering specific petroleum products and lasting up to three months at a time.
Last week, the Department of Finance disclosed that they were awaiting DOE certification before proposing a complete suspension of excise taxes on liquefied petroleum gas (LPG) and kerosene. The LPG Marketers Association has called for even broader relief measures, including gasoline and diesel, as fuel prices soar due to ongoing Middle Eastern tensions.
The government had previously exercised this mechanism in April, when the DOE certified that Dubai crude's 30-day average reached $93.71 per barrel. Marcos then suspended excise taxes on LPG and kerosene via Executive Order No. 114, later restoring them in July after the average dropped below the $80 mark.
RA 12316, passed in March, empowers the President to either fully suspend or partially reduce excise taxes on selected petroleum products whenever the one-month average Dubai crude price hits or exceeds $80 per barrel. This development is seen as a positive step towards supporting motorists during the ongoing Middle Eastern crisis, in collaboration with economic managers.
The certification follows two consecutive weeks of substantial pump price hikes. Gasoline prices surged by P5.68 per liter on Tuesday, diesel increased by P4.31, and kerosene rose by P4.62. When combined with the previous week's increases, gasoline prices jumped by P10.37 per liter over two weeks, diesel by P9.49, and kerosene by P10.20.
Some fuel products are now selling for over P100 per liter at select stations. Rising oil prices can be attributed to escalating Middle Eastern tensions and concerns over supply routes, particularly the Strait of Hormuz, a vital conduit for global oil shipments.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
