oil industry

DOE wants Duterte to certify as urgent department’s power to suspend fuel taxes

Aika Rey

OIL PRICES. A gasoline station attendant top ups fuel for a jeepney.


The Department of Energy is also looking into tapping revenues collected from the tax reform law to fund the proposed fuel subsidy program for jeepney drivers

The Department of Energy will ask President Rodrigo Duterte to certify as urgent the DOE’s requested measure that would give the agency the power to suspend oil excise taxes.

In a briefing on Friday, October 22, Energy Assistant Secretary Gerardo Erguiza Jr. said that amending the oil deregulation law is among the priority bills that the department wants Congress to immediately act upon.

The DOE maintained that the President cannot issue an executive order to suspend fuel taxes despite the prevailing state of calamity in the Philippines due to the pandemic.

“It was submitted to the Presidential Legislative Liaison Office, which is coordinating with Congress. It is among the priority bills that the DOE wants to be certified [as urgent],” Erguiza said.

Congress is currently on break. Session will resume on November 8.

The DOE is proposing that lawmakers provide a framework in the law that would allow the department to intervene in case oil prices surge.

The energy department is also asking Congress to require the unbundling of the cost of retail fuel products “to determine their true and passed-on costs.”

As of Tuesday, October 19, the total oil price increases since the start of 2021 for gasoline and diesel have reached P19.65 per liter and P18 per liter, respectively.

Transport groups have already sounded the alarm on the rising costs of fuel,by filing a fare hike petition with the Land Transportation Franchising and Regulatory Board.

Should excise tax on oil be suspended, the Philippines stands to lose P`131 billion in revenues. The Department of Finance said that any suspension “should be appropriately studied” as the government’s COVID-19 pandemic response could be affected.

For now, in a bid to compromise, the government is looking for ways to fund a fuel subsidy program for jeepney drivers. The DOE has also talked to local fuel companies to give jeepney drivers discounts. Both measures have been done in the past.

Increasing the capacity of public utility jeepneys is also on the table, with the Inter-Agency Task Force having the final say.

Erguiza said Friday that the department is currently looking at the feasibility of invoking a provision in the tax reform law that would allow the agency to tap into the excise tax collections.

Under Section 82 of the tax reform law, 30% of revenues collected could be tapped to fund social welfare programs such as fuel vouchers for jeepney drivers, among others.

“We are now in the process of asking the DBM (Department of Budget and Management) if we can tap into this,” said Erguiza in a mix of English and Filipino.

“Part of the resolution is to be able to determine from DBM how much exactly has been collected and if we can use it for this purpose,” he added. – Rappler.com

Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.