EO 114: Suspending Excise Tax on Petroleum Products
Legal question
Which fuels does the excise tax suspension actually cover, and how long does it last?
Applicable laws and rules to discuss
- Executive Order No. 114, suspending petroleum excise taxes
- Republic Act No. 12316, granting authority to suspend or reduce petroleum excise tax
- Section 148, National Internal Revenue Code of 1997
It covers LPG and kerosene — not gasoline or diesel
This is the detail most easily misread. The suspension applies to LPG, except when used as raw material for petrochemical production or used for motive power, and to kerosene, except when used as aviation fuel. Gasoline and diesel excise taxes are not suspended by this Order, so motorists should not expect a pump-price cut from it. The practical beneficiaries are households cooking with LPG and using kerosene.
The suspension is full, but short
Excise taxes on the covered products are fully suspended for three months from the Order's effectivity. The Development Budget Coordination Committee reviews the suspension monthly and recommends to the President whether to continue, modify, extend, or terminate it.
It can switch off automatically
Rates revert to those prescribed under Section 148 of the Tax Code without any further issuance, upon whichever comes first: one week after the one-month average Dubai crude price based on MOPS falls below USD 80 per barrel, as certified by the DOE, or expiry of the suspension period. Businesses should not assume a grace period after the trigger is hit.
The paper trail behind it
The DOE and DOF, through the BIR and BOC, must inventory existing stocks of LPG and kerosene as of effectivity, and the BIR and BOC submit monthly information to Congress on the declared value and volume of covered products. The DOE must also require oil companies to submit monthly cost-component data, reported onward to the DBCC and Congress as RA 12316 requires.
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