MANILA, Philippines — In his first major move using newly granted emergency powers, President Ferdinand Marcos Jr. announced the immediate suspension of excise taxes on Liquefied Petroleum Gas (LPG) and kerosene on Monday, April 13, 2026.
The decision aims to provide direct financial relief to millions of Filipino households and small businesses struggling with the high cost of living amidst the ongoing global energy crisis. However, the President stopped short of suspending taxes on diesel and gasoline, pending further interagency review.
The tax suspension is the first implementation of Republic Act No. 12316, which allows the President to adjust fuel taxes if Dubai crude prices exceed $80 per barrel for 30 days.
- LPG Savings: The excise tax of ₱3.36 per kilogram has been eliminated. For a standard 11-kilogram LPG cylinder used in most Filipino kitchens, this translates to a price reduction of nearly ₱37.00.
- Kerosene Relief: The ₱5.65 per liter excise tax on kerosene—primarily used by low-income families for lighting and cooking—has been removed entirely.
- Duration: Under the law, the suspension can last up to three months but cannot exceed one year in total duration.
Despite pressure from transport groups, President Marcos remains firm on maintaining the 12-percent Value-Added Tax (VAT) on petroleum products.
- Revenue for Aid: The President explained that VAT collections are essential to fund targeted social assistance programs. “If we take away VAT… it will only help the petroleum market. We need funding to help the entire society,” Marcos stated.
- Legislative Hurdles: Malacañang clarified that while the President can now adjust excise taxes, he currently lacks the legal authority to suspend VAT, calling on Congress to pass a separate measure if such a move is desired.
The most anticipated decision regarding taxes on diesel and gasoline remains in limbo.
- Ongoing Review: The Uplift (Unified Package for Livelihoods, Industry, Food, and Transport) Committee is meeting today, April 14, to deliberate on the potential suspension of excise taxes for these fuels.
- Potential Impact: If the excise tax is fully suspended, diesel prices could drop by another ₱6 per liter, while gasoline could see a ₱10 per liter reduction.
- Fiscal Concerns: The Department of Finance (DOF) has warned that a full suspension of excise taxes on all fuels through December could lead to a revenue loss of at least ₱136 billion.
During a House hearing on Monday, lawmakers criticized the DOF for its plan to apply the tax suspension only to incoming fuel shipments.
- Marikina Rep. Miro Quimbo argued that the relief should apply to existing inventory immediately, proposing that the government offer “tax credits” to oil companies that have already paid the levy on their current stock.
- This would ensure that consumers feel the price drop at the pump instantly, rather than waiting for weeks for new shipments to arrive.
As the government balances fiscal stability with public relief, the suspension of LPG and kerosene taxes marks a significant first step in the administration’s strategy to mitigate the “energy emergency” of 2026.