Senator seeks fuel tax relief amid oil shock

Sen. Loren Legarda has filed Senate Bill No. 1942, or the proposed Fuel Price Relief Act, seeking a temporary rollback or suspension of excise tax and value-added tax on gasoline, diesel, kerosene and liquefied petroleum gas when global oil prices hit crisis levels.

The proposal comes as Filipino consumers face what the senator described as relentless fuel-price increases that are pushing up transport fares and household expenses nationwide.

In the release, Legarda said diesel prices had risen by as much as PHP 24 per liter, kerosene by PHP 32 to PHP 38.50 per liter, and gasoline by PHP 7 to PHP 13 per liter in a single week as oil companies implemented staggered “big-time” hikes.

At a diesel pump price of about PHP 70 per liter, a PHP 24 increase would amount to a jump of more than 50% in just a few days, based on figures cited in the release.

Legarda said the increases were already raising concerns over possible fare hikes and higher cooking fuel costs for households that rely on LPG.

The bill proposes a rules-based mechanism that would allow the government to dial down fuel taxes for a limited period before the full impact of overseas supply shocks is passed on to commuters, families and small businesses.

Under the measure, relief could last up to 90 days and be extended for another 90 days if the crisis persists.

The tax relief would be lifted automatically once Dubai crude falls below the bill’s trigger level for 30 consecutive days.

Legarda said the measure is meant to address the compounding effect of fuel excise taxes and the 12% VAT, which together raise pump prices further during global oil spikes.

Under the TRAIN law, excise taxes on petroleum products were increased, with unleaded gasoline taxed at PHP 10 per liter, diesel at PHP 6 per liter, and LPG and kerosene at PHP 3 per liter.

Congressional policy researchers have noted that diesel and kerosene were previously untaxed before those reforms were phased in.

“Kapag tumataas ang presyo ng krudo, hindi lang ito isyu ng mga may sasakyan, ito ay isyu ng pamasahe, presyo ng gulay at isda, at araw-araw na gastos ng bawat pamilyang Pilipino,” Legarda stressed.

The senator said the bill was designed to help prevent sharp fare adjustments and sudden increases in household energy bills when oil prices surge because of events far from the Philippines, including disruptions linked to conflict near key shipping lanes such as the Strait of Hormuz.

The waterway is one of the world’s most critical crude oil transit chokepoints, making regional instability there a major driver of global price volatility.

“Ibig sabihin, kapag umakyat nang sobra ang presyo ng langis sa pandaigdigang merkado, hindi buwis mismo ang lalong magpapabigat sa presyo sa gasolinahan,” Legarda explained.

“May malinaw at nakatakdang mekanismo na kikilos para magbigay-ginhawa sa mga konsumer.”

Beyond tax relief, Senate Bill No. 1942 would prohibit hoarding, profiteering, cartelization and other forms of market manipulation in the fuel sector.

It also directs authorities overseeing energy, trade, customs and competition to strengthen monitoring and enforcement during periods of abnormal price movements.

“Kung magbibigay tayo ng tax relief sa mamamayan, dapat siguraduhin din nating hindi ito kakainin ng abusadong pricing o kartel sa langis,” Legarda noted.

The measure enters a broader policy debate over how much revenue the government could forgo if fuel taxes are suspended during a prolonged oil shock.

Finance officials have warned in recent hearings that suspending petroleum excise taxes could significantly reduce government collections, while Customs officials have separately flagged the fiscal impact of removing both excise taxes and VAT on fuel.

Legarda said the intent of the bill is not to dismantle the tax system, but to create a targeted emergency tool for extraordinary market disruptions that hit low-income and transport-dependent sectors the hardest.

“Hindi natin kontrolado ang giyera sa ibang bansa o galaw ng merkado sa labas,” she said.

“Pero kontrolado natin kung gaano kabigat ang buwis na ipinapasa sa mamamayan kapag may matinding krisis sa presyo ng langis.”

“Sa panahong bawat litro sa gasolinahan ay pinag-iipunan, tungkulin ng Estado na may konkretong paraan para maibsan ang bigat na ito,” Legarda added.

“Ito ang layon ng panukalang batas na ito, praktikal, targetted, at agarang tulong, lalo na sa pinakamahirap.”