House of Representatives to approve fuel tax relief bill within the week

Reeling from the consecutive fuel price hikes? A bit of relief may be on the way. The House of Representatives is set to approve a measure this week that would give President Ferdinand Marcos Jr. the power to temporarily cut or suspend excise taxes on fuel.

House Bill No. 8418, which the President has certified as urgent, is designed with strict conditions and time limits. This allows the government to act quickly in a crisis without waiting for months to pass a new law.

Under current law, excise taxes are included in the retail price of petroleum products. This means that higher fuel costs affect not just motorists, but also transportation, deliveries, electricity, and the prices of goods in stores and markets. Specifically, the government imposes P10 per liter on gasoline, P6 per liter on diesel, and P5 per liter on kerosene under the 2017 Tax Reform for Acceleration and Inclusion law.

HB 8418 would allow the President, with input from the Development Budget Coordination Committee and the Secretary of Energy, to temporarily suspend or reduce fuel excise taxes under specific conditions.

One trigger is when the average Dubai crude oil price, based on the Mean of Platts Singapore, hits or exceeds USD 80 per barrel for a month before the order. This threshold is meant to address sustained price pressure rather than short-term fluctuations.

Another trigger applies if the President declares a state of national emergency or calamity and domestic fuel prices spike significantly, as certified by the Secretary of Energy. This ensures the authority can respond when local conditions are severe. The bill allows the tax reduction to target specific petroleum products and be applied either as a full suspension or partial cut, depending on the situation.

To prevent misuse, any suspension or reduction can last no more than six months at a time, unless Congress extends or terminates it. Overall, the total period cannot exceed one calendar year. Once the conditions that justified the tax relief no longer exist, the excise rates would automatically return to normal without further action. In addition, the President’s authority under the bill would be valid only until Dec. 31, 2028.

For transparency, the measure requires the President, through the Secretary of Finance, to report to Congress within 15 days of any order and every month thereafter. The report must outline the basis for the action, estimated revenue loss, and expected effects on inflation, fuel prices, and other parts of the economy.

Finally, the Department of Finance, Budget and Management, Economy, Planning and Development, Energy, and the Bangko Sentral ng Pilipinas, together with the Bureau of Internal Revenue and Bureau of Customs, are tasked with issuing implementing rules within 15 days of the law taking effect.

Fuel prices are still expected to rise sharply in the coming weeks. How much the suspension of excise taxes will soften the blow exactly, however, is not yet clear. We’ll keep you posted on more updates.