Gov't to suspend fuel excise tax should oil reach $80 per barrel

Gov't to suspend fuel excise tax should oil reach $80 per barrel image

Anton Andres / Jose Altoveros | May 25, 2018 06:40

Presidential spokesperson Harry Roque cites TRAIN provision

For the past couple of months, fuel prices have soared across the nation. Some provinces have even seen prices reach as high as Php 70 per liter. Since the new excise taxes, gasoline prices have been up by Php 7.00 per liter, while diesel, which was previously unburdened with tariffs, has gone up by Php 2.50 per liter on average.

To maintain gas prices, and alleviate the masses of fuel costs, the Malacanang will temporarily suspend Tax Reform for Acceleration and Inclusion (TRAIN) Law for fuels only. Presidential spokesperson Harry Roque reiterated that one of the provisions of the new tax law stated that, should oil prices hit a certain value per barrel, the implementation of additional taxes on fuels will be put on hold. Roque is referring to Section 43 of RA 10963.

The provision stated, "For the period covering 2018 to 2020, the scheduled increase in the excise tax on fuel as imposed in this Section shall be suspended when the average Dubai crude oil price based on Mean of Platts Singapore (MOPS) for three (3) months prior to the scheduled increase of the month reaches or exceeds Eighty dollars (USD 80) per barrel".

Based on the article, The TRAIN Law had accounted for the possible rise in fuel costs. The planned suspension is in prepation of the current trend of rising crude oil prices. Based on crude oil prices on Mean of Platts Singapore (MOPS), a barrel currently hovers at about $77 to $78, meaning just a few more dollars and fuel taxes will be suspended.