SEN. Bam Aquino called for the removal of value-added tax (VAT) and excise taxes on petroleum products, including diesel and liquefied petroleum gas, amid successive oil price hikes.
“Once again, Filipinos are the ones caught in the squeeze,” Aquino said in a statement on Tuesday.
Pump prices rose sharply for the third consecutive week in September, with the Department of Energy (DOE) announcing increases of P8.82 per liter for diesel, P6.47 for kerosene, and P4.88 for gasoline effective Sept. 22. The latest adjustments brought the cumulative September increases to P18.31 per liter for diesel, P16.67 for kerosene, and P15.25 for gasoline.
The DOE had earlier certified that the one-month average Dubai crude price reached $99.41 per barrel from Aug. 13 to Sept. 11, exceeding the $80 threshold under Republic Act 12316 for possible suspension or reduction of fuel excise taxes. The certification was transmitted to the Development Budget Coordination Committee (DBCC), which was evaluating the possible relief package.
The DBCC’s review provides a policy backdrop to Aquino’s proposal. Under the law, the president may suspend or reduce excise taxes on petroleum products upon the DBCC’s recommendation and in coordination with the Energy secretary, subject to the statutory conditions and a maximum three-month period.
The proposed removal of VAT and excise taxes would have implications for government revenues and fiscal policy, while the potential benefit to consumers would depend on how tax changes are reflected in retail fuel prices.
