About ten days after the Senate approved the “certified urgent” SB 1982, President Ferdinand “Bong Bong” Marcos Jr. signed it into law as Republic Act 12316, granting him emergency powers to cut or even fully suspend the excise tax on petroleum products.

The President may, upon the recommendation of the Development Budget Coordination Committee (DBCC), in coordination with the Secretary of Energy, suspend the imposition of or reduce the excise taxes on fuel under this Section when the average Dubai crude oil price, based on the Mean of Platts Singapore (MOPS), reaches or exceeds Eighty US Dollars (USD 80) per barrel for one (1) month immediately preceding the issuance of the suspension or reduction order.

The suspension or reduction may be applied to specific petroleum products and implemented either as a full suspension or partial reduction of the applicable excise tax rates under this Section, as may be warranted by prevailing conditions.

Any suspension or reduction authorized under this Section shall be effective for a period not exceeding three (3) months: Provided, That the aggregate period of the suspension or reduction shall not exceed one (1) calendar year: Provided, further, That the excise tax on fuel products shall revert automatically to the rates provided under this Section, without need for further legislative or executive action, upon the occurrence of any of the following conditions, whichever comes first:

 

(a) One (1) week after the one (1)-month average of Dubai crude oil price based on MOPS falls below Eighty US Dollars (USD 80) per barrel, as duly certified by the Department of Energy (DOE); or

 

(b) After three (3) months.

Provided, That the power of the President to temporarily suspend or reduce the excise tax on petroleum products granted under this Section shall be exercised only until December 31, 2028.

In simple terms, the law lets the President temporarily cut or even remove fuel excise taxes, which are PHP 10 per liter for gasoline and PHP 6 per liter for diesel when oil prices go through the roof.

Of course, there are some criteria and limitations.

He can only do this if the Dubai crude hits USD 80/barrel for a month, and the DBCC and DOE gives the recommendation. The cut or suspension could last up to 3 months at a time, but cannot go beyond 1 year in total. And, once prices drop, the excise taxes go back to normal.

The law will take effect 15 days after it has been published in the Official Gazette or a newspaper of general circulation.