Excise holiday for LPG, kerosene over–BIR
The three-month suspension of excise on kerosene and liquefied petroleum gas (LPG) has officially been lifted after the average Dubai crude oil price fell below the $80-per-barrel threshold, triggering the automatic reinstatement of the tax.
In a statement on Wednesday, the Bureau of Internal Revenue (BIR) said the Department of Energy (DOE) has certified that the one-month average Dubai crude oil price, based on the Mean of Platts Singapore, settled at $79.45 per barrel from June 1 to June 30.
Following the DOE certification, the BIR said that excise rates on kerosene and LPG automatically reverted to those prescribed under the National Internal Revenue Code (NIRC), effective July 8.
The suspension was first implemented through Executive Order No. 114, which was signed on April 16.
Purpose of order
The order was aimed at helping cushion consumers from rising global oil prices amid the Middle East war.
Under the order, excise rates automatically revert to their original rates upon the occurrence of any of the following, whichever comes first: One week after the one-month average Dubai crude oil price falls below $80 per barrel or upon the expiration of the three-month suspension.
This means the original excise rates of P5.65 per liter for kerosene and P3.36 per kilogram for LPG, or almost P37 for an 11-kg tank, are back in effect.
In mid-June, the United States and Iran signed a memorandum of understanding, sealing a tentative peace deal that could end the war and reopen the Strait of Hormuz, a key global oil shipping route. The development eased concerns over potential supply disruptions, sending global oil prices back to their prewar levels.
Delayed effect
The DOE recently acknowledged that the easing of global oil prices has started to filter through the domestic market, although it said the impact would not be immediately reflected in local pump prices and could take several weeks or even months to be fully transmitted.
For the week of July 7 to July 13, oil companies rolled back gasoline prices by as much as P1.75 per liter, while diesel prices were cut by P1.57 to P3.57 per liter. Gasoline prices either decreased by P1.75 per liter or increased by 25 centavos per liter.
However, oil prices began climbing again this week amid renewed hostilities between the United States and Iran, raising fresh concerns over supply disruptions in the Middle East.
US President Donald Trump declared on Wednesday that the ceasefire was over, calling the interim peace deal “a waste of time.”
