The Philippines has temporarily suspended excise taxes on Liquefied Petroleum Gas (LPG) and kerosene to ease the impact of rising fuel prices linked to the ongoing conflict in the Middle East, the presidential palace announced on Friday 25th September. President Ferdinand R. Marcos Jr. issued Executive Order No. 125 on 25th September following a recommendation from the Development Budget Coordination Committee. The order took effect immediately upon publication in the Official Gazette or a newspaper of general circulation.
“The excise taxes on LPG, except when used as a raw material for production of petrochemical products or used for motive power, and kerosene, except when used as aviation fuel, are hereby fully suspended,” the order stated.
The suspension covers LPG and kerosene but does not extend to gasoline or diesel, which have also faced sharp price increases in recent weeks. The measure is intended to provide relief from elevated energy costs amid continued volatility in global oil markets.
The cut translates to a reduction of about three pesos, or five US cents, per kilogram of LPG. Officials have previously put the equivalent savings at roughly 3.36 pesos per kilogram, or nearly 37 pesos off a standard 11-kg household cylinder, along with about 5.60 pesos per litre for kerosene.
Marcos said the tax would automatically revert after three months, or one week after the one-month average Dubai crude oil price falls below US$80 per barrel. He said the average crude oil price over the 30 days to 11th September had reached US$99.41 per barrel.
The Department of Energy certified that the one-month average Dubai crude oil price, based on the Mean of Platts Singapore, stood at US$99.41 per barrel from 13th August – 11th September, above the US$80 per barrel threshold set under Republic Act No. 12316. The law, signed earlier this year, authorises the president to temporarily suspend or reduce fuel excise taxes for up to three months when the threshold is breached.
The Development Budget Coordination Committee, in coordination with the Department of Energy, will review the suspension 15 days after its issuance and every month thereafter, submitting reports to the House of Representatives and the Senate. Based on these reviews, the committee may recommend continuation, modification, extension, or termination of the measure.
The Department of Energy and the Department of Finance, through the Bureau of Internal Revenue and the Bureau of Customs, were directed to conduct an inventory of existing LPG and kerosene stocks as of the order’s effectivity. Oil companies must also submit monthly data on the cost components of the covered products during the suspension period, while the Bureau of Internal Revenue and Bureau of Customs will provide Congress with monthly information on declared values and volumes.
The import-dependent Philippines declared a national energy emergency in March and has been forced to cast an ever-wider net for fuel, including purchases of oil from Russia. The war in the Middle East and high inflation trimmed the country’s economic growth in the first half to 2.6%, well below government targets. Fuel prices in the Philippines are unregulated, unlike in neighbouring countries including Indonesia, Malaysia, and Thailand, leaving local transport firms to deal with market fluctuations on their own.
The excise cut followed a threat by bus operators to hold a two-day nationwide transport strike next week to press the government to let them raise fares, which are state regulated. Bus groups have warned that operations risk becoming unsustainable amid rising diesel costs, although some statements framed their appeals as notices of potential insolvency rather than formal strike threats. Separate transport groups have planned their own actions over fuel prices and related concerns.
This is the second suspension of its kind this year. An earlier three-month measure under Executive Order No. 114 took effect in April after Dubai crude prices exceeded the threshold, before the taxes reverted once the average later fell below US$80 per barrel.
Finance officials have indicated reluctance to extend similar relief to gasoline and diesel, citing progressive concerns and potential monthly revenue losses estimated in the billions of pesos. LPG remains central to household cooking across the archipelago, particularly for lower-income families who allocate a larger share of their budgets to basic fuels. The targeted relief aims to cushion daily expenses without broader fiscal strain, even as global oil markets remain volatile due to the conflict in the Middle East.
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