DOF chief seeks LPG, kerosene tax freeze amid oil spike

Finance Secretary Frederick D. Go told the Manila Bulletin on Thursday, Sept. 10, that he has proposed suspending fuel excise taxes, mirroring the relief measures introduced when the US-Iran conflict escalated in the first quarter.

“I proposed to do that. Exactly the same as when war started,” Go said, adding that he has been persistently following up on the proposed tax halt.

Separately, the Department of Finance (DOF) said in a statement that Go is currently “waiting for the certification from the Department of Energy (DOE) that the price of Dubai Crude oil has exceeded the threshold.”

Once certified, the DOF noted that Go stands “prepared to immediately propose to the Development Budget Coordination Committee (DBCC) the suspension of 100 percent of the excise taxes on LPG and kerosene, for the President’s approval.”

Brent crude, the global benchmark for oil prices, overshot $100 a barrel on Wednesday, Sept. 9. Prices held steady above that mark following renewed US and Iranian attacks on shipping.

The Marcos administration previously lifted a three-month tax suspension on LPG and kerosene after average Dubai crude fell back below the $80-per-barrel threshold. Under existing rules, once Dubai crude settles below that trigger level for a month, any tax suspension is automatically reinstated.

Data monitored by the DOE showed that Dubai crude rose by about $8 per barrel last week, while international gasoline and diesel prices increased by around $9 and $10 per barrel, respectively.

“Crude prices are expected to remain supported by ongoing US-Iran tensions, tightening inventories, and stronger refinery demand, while China’s crude import trends will remain a key watchpoint,” the DOE said.

Domestic oil companies raised pump prices from Sept. 8 to 14, with gasoline increasing by ₱4.10 to ₱4.70 per liter, diesel by ₱4.60 to ₱5.20 per liter, and kerosene by ₱5.58 to ₱5.60 per liter.

This latest round of adjustments brings year-to-date net price increases to ₱59.32 per liter for gasoline, ₱60.46 for diesel, and ₱53.45 for kerosene.

Go earlier noted that forgone revenues from the initial three-month tax break on kerosene and LPG totaled ₱2.5 billion.

Should the DOE certify that crude oil has breached the $100 threshold, the tax freeze will remain limited to LPG and kerosene. Finance Undersecretary Karlo Adriano previously explained that extending the suspension to diesel and gasoline would cost the government more than ₱40 billion over three months, justifying the narrower relief coverage.

— Derco Rosal