Exemption from diesel, the suspension of fuel tax will be reduced, said economic managers
By Justine Irish DP. You are happy, Senior Reporter
STOPPING excise duty on diesel and petrol will bring limited relief compared to the increase in liquefied petroleum gas (LPG) and kerosene as the drop in pump prices will be small, said the Ministry of Finance.
“The Development Budget Coordination Committee (DBCC) has decided that suspending the diesel and gasoline tax will not provide meaningful relief, as any reduction in the retail pump price will be small and will largely remove existing market forces,” said Finance Secretary Frederick D. Go in a statement on Tuesday.
Conversely, suspending the excise tax on kerosene and LPG will directly reduce the burden on Filipino families and small businesses by helping them meet basic energy needs, he said.
On Monday, President Ferdinand R. Marcos, Jr. approved the suspension of excise duties on LPG and kerosene while leaving the duties on petrol and diesel unchanged.
“This release is focused on the most vulnerable,” said Mr. Go, citing savings of about P36.96 per 11-kg cylinder of LPG and P5.56 per liter of kerosene due to the suspension.
The 2023 Household Income and Expenditure Survey of the Philippine Statistics Authority showed that 48% of total kerosene consumption is attributed to less than 30% of households, while 55.7% of LPG users come from the lower 70%.
“This means the benefits go beyond the poorest households to support low-income families. For these families, every peso saved in fuel costs means more resources for food, education, and health care,” he added.
Meanwhile, the government will continue to provide additional targeted and managed subsidies to the most vulnerable sectors, including public transport operators and drivers, commuters, and farmers and fishermen, said the finance official.
“This limited and targeted response is designed to deliver immediate relief, ensuring that support reaches those who need it most, while maintaining fiscal space to maintain essential public services and respond to an unpredictable global environment,” he said.
“The DBCC will continue to closely monitor developments in global oil markets and stands ready to adjust its policy response as needed.”
The Philippines is under a one-year state of national emergency, which gives the government more power to secure fuel and protect the economy from rising oil prices amid the Middle East war.
