House bill seeks to grant president authority to slash fuel excise tax during crises
A bill has been filed in the House of Representatives that seeks to give the president authority to suspend or reduce the excise tax on fuel during crises.
House Bill No. 8292, filed by House Speaker Bojie Dy and Majority Leader Sandro Marcos on March 4, aims to give the powers amid the rising tensions in the Middle East, which have heightened concerns over the potential disruption of oil supply.
"Rising fuel prices impose a disproportionate burden on the most vulnerable sectors of society, particularly farmers, fisherfolk, public transport operators, small enterprises, and low-income households whose livelihoods are directly affected by increases in petroleum costs," the explanatory note read.
"In times of national emergency or sudden global disruption, the government must be equipped to act swiftly to mitigate the impact of these shocks and safeguard the welfare of the Filipino people."
The lawmakers added that Section 148 of the National Internal Revenue Code of 1997 imposes excise taxes on petroleum products "without providing sufficient flexibility during extraordinary crises."
The fixed excise taxes on petroleum products, according to the Tax Reform for Acceleration and Inclusion (TRAIN) Law, include P10 per liter for gasoline, P6 per liter for diesel, and P5 per liter for kerosene.
Dy and Sandro continued to say that the measure during times of emergency may worsen economic hardship, thus, the need for the new measure.
According to the measure, the president, Sandro's father Ferdinand Marcos Jr., may suspend or reduce excise taxes on fuel upon the recommendation of the finance and energy secretaries. This would be subject to conditions such as the average Dubai crude oil price exceeding $80 per barrel for at least three months, and a state of national emergency or calamity is declared, resulting in massive oil hikes.
Any suspension would be effective for six months, unless extended or terminated by Congress through a joint resolution.
On March 6, Marcos Jr. announced some initiatives to conserve energy resources during the Middle East conflict. This includes implementing a four-day work week for some government offices and cutitng electricity and petroleum costs by 10 to 2%.
Energy Secretary Sharon Garin, meanwhile, warned of a fuel increase from P17 to P24 per liter this week. Some oil firms have committed to rising prices in increments of P2.50 or P10, and not all at once.
The government is unable to control fuel prices since the oil industry is deregulated, meaning oil companies are obligated to only report and justify their price adjustments to the DOE.
The conflict in the Middle East began when Israel, in coordination with the US, launched airstrikes on Iran on Feb. 28, taking out Iranian Supreme Leader Ali Khamenei. Retaliatory attacks have upended the region, as well as markets across the globe
