The Senate has approved a bill granting President Ferdinand Marcos Jr. the authority to suspend or reduce excise taxes on petroleum products, a move aimed at cushioning consumers and key industries from sustained high global oil prices.

Seventeen senators voted to pass Senate Bill No. 1982 on third and final reading on Tuesday, allowing the President to act when oil prices—based on the Mean of Platts Singapore (MOPS)—reach or exceed USD 80 per barrel for one month prior to any suspension or reduction order.

The bill, sponsored by Sen. Pia Cayetano as chair of the Senate committee on ways and means, was certified as urgent by Malacañang, allowing the chamber to fast-track its approval amid rising global oil prices.

The Senate bill introduces a more responsive mechanism to mitigate fuel cost surges that directly affect power generation costs, transport, and industrial operations. Fuel is a major input cost for diesel-fired power plants, peaking units, and off-grid generation, particularly in island provinces reliant on imported petroleum.

The Senate version allows tax suspension purely based on price thresholds. However, its counterpart in the House—House Bill No. 8418—adds a stricter condition, requiring the declaration of a state of national emergency or calamity before such relief can be triggered. This sets up a potential point of reconciliation in the bicameral process, with implications on how quickly relief can be deployed during price shocks.

In parallel, the bill also seeks to amend the Biofuels Act of 2006 by allowing the temporary suspension of mandatory biofuel blending if blended fuel prices exceed pure fossil fuels by at least 5%.

The final shape of the measure will depend on bicameral deliberations, particularly on whether emergency conditions will be required before tax relief is implemented.

Data from the Department of Finance show the total potential reduction if the President suspends or reduces fuel excise taxes–PHP 11.20 per liter of gasoline (PHP 10 excise tax plus PHP 1.20 VAT), PHP 6.72 for diesel (PHP 6.00 excise tax plus PHP 0.72 VAT), and PHP 5.60 for kerosene (PHP 5.00 excise tax plus PHP 0.60 VAT).

How should policymakers balance consumer relief with fiscal stability and clean energy targets when oil prices surge?

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