Lawmakers Rally Behind Fuel Tax Suspension to Curb Soaring Prices

MANILA — Lawmakers are pushing for the swift enactment of a measure that would grant the President emergency powers to suspend excise taxes on petroleum products. The House Committee on Ways and Means recently approved a substitute bill consolidating 17 measures aimed at providing immediate relief to Filipinos as global oil markets face extreme volatility.

The proposed legislation amends the National Internal Revenue Code to allow for the suspension of the P10 per liter excise tax on gasoline and P6 per liter on diesel when certain triggers are met, such as Dubai crude reaching $80 per barrel or the declaration of a national emergency.

Strategic Response to Market Volatility

Bicol Saro Party-list Rep. Terry Ridon hailed the committee’s decision as a “timely and decisive response” to global supply disruptions. With potential diesel prices projected by the Department of Economy, Planning, and Development (DEPDev) to hit P96 per liter in a worst-case scenario, the suspension could lower retail prices to approximately P90.04.

“With tensions in key petroleum-producing regions threatening to disrupt global supply and push fuel prices higher, the Philippine government must have the necessary tools to respond quickly and decisively to protect Filipino consumers,” Ridon stated. He further urged the President to “immediately declare a state of national emergency so that the suspension or reduction of excise taxes on petroleum products can take effect in the soonest possible time.”

Balancing Relief and Revenue

Former Speaker and Leyte Rep. Ferdinand Martin Romualdez, a primary author of the initiative, noted that while the government relies on these taxes for social services, the current spike justifies an intervention.

“An excise tax suspension or reduction will be a big relief to our people at this time of soaring fuel prices. A suspension would mean a retail price reduction of P6 to P10 per liter,” Romualdez said. While he initially preferred a permanent removal, he acknowledged the fiscal reality: “That would have been the ideal measure, but I also understand the need for the government to continue relying on billions in excise tax collections for vital social services.”

The Department of Finance has warned of a potential P136 billion revenue decline for 2026 if the taxes are removed through the end of the year. However, Ako Bicol Party-list Rep. Jan Chan emphasized that the priority remains the “ordinary Filipino.”

“We welcome the approval of the House Ways and Means Committee proposal to give emergency authority to the President to temporarily suspend fuel excise tax if needed. In the midst of oil price volatility in the world market, it’s important that the government helps alleviate the burden of motorists and ordinary Filipino,” Chan said in Filipino.

Demanding Transparency from Oil Giants

A key point of contention during the deliberations was the “inventory lag” cited by oil companies, who claim prices cannot drop immediately until old, taxed stock is depleted. Romualdez countered this by demanding full disclosure of current inventories.

“They should declare what stocks they have that they would sell with excise taxes and what supply is coming which they would sell without these levies. For the good and guidance of our people,” Romualdez insisted. The bill now moves forward for further plenary discussion as the government monitors the escalating conflict in the Middle East and its impact on the Strait of Hormuz, a critical artery for global oil trade.*