Government moves to suspend LPG, kerosene excise taxes

National

By Patricia Andrea Pateña-Matheu

HOUSEHOLDS relying on LPG and kerosene could soon get a break from higher fuel costs as the government moves to suspend excise taxes on the two products.

Finance Secretary Frederick Go said Tuesday that he had signed a resolution recommending the suspension, which is expected to reach the Office of the President within days and could be announced as early as next week.

“By next week, it should be out already,” Go said in a Philstar report.

Speaking at the Department of Finance (DOF) budget hearing, Go said the proposed measure is similar to the previous three-month fuel tax relief program but excludes diesel and gasoline.

He said LPG and kerosene were selected because they are commonly used by vulnerable households for cooking and other daily needs, with the measure aimed at easing the impact of elevated global oil prices on these sectors.

The move follows a certification by Energy Secretary Sharon Garin that the average price of Dubai crude oil over the past month had breached the $80-per-barrel threshold. The certification was transmitted to the inter-agency Development Budget Coordination Committee (DBCC) for evaluation.

From August 13 to September 11, the average benchmark price of Dubai crude stood at $99.41 per barrel.

Under Republic Act 12316, the DBCC is tasked with recommending fuel excise tax adjustments to the President.

The government had previously suspended excise taxes on LPG and kerosene in mid-April. The measure was lifted in July after the Department of Energy certified that the one-month average price of Dubai crude had fallen below the threshold.

Go said the DBCC is not inclined to recommend tax suspensions for diesel and gasoline, which he described as “not progressive.” He said such a move could result in about P12 billion in monthly revenue losses.

Instead, the government provides targeted subsidies to vulnerable sectors to cushion the impact of higher fuel prices.

Asian Development Bank country director Andrew Jeffries said fuel prices had risen again in recent weeks amid the conflict in the Middle East.

“We keep saying easing of that issue has a very positive effect on many economies and particularly here. Unfortunately, that hasn’t happened in the last month,” he said in the same article.

Jeffries said the renewed increase in fuel prices may have partly influenced the decision to ease taxes, noting that higher costs are hitting consumers, particularly poorer and more vulnerable households.(MyTVCebu)