President Ferdinand Marcos Jr. has signed into law Republic Act No. 12316. This measure allows the president to reduce or suspend the excise tax on petroleum products during periods of high global oil market volatility.

The law authorizes the President, upon the recommendation of the Development Budget Coordination Committee (DBCC) and in coordination with the Department of Energy (DOE), to temporarily lower or suspend fuel excise taxes when certain conditions are met. This includes when the average Dubai crude oil price reaches at least USD 80 per barrel over one month.

According to the law, any suspension or reduction can only be implemented for 3 months at a time, with the total duration to not exceed past a year. The authority granted by this law will last until December 31, 2028.

The act was previously declared as urgent by the President, thus allowing it to move quickly through Congress as ever-rising fuel prices intensified in the domestic market.

Earlier discussions on the proposal also highlighted its limits. The DOE previously stated that the act might not provide as much relief as anticipated. This is due to the fact that many other external factors, specifically global oil prices, will still continue to drive up fuel prices.

The policy direction builds on earlier proposals from lawmakers, including Senator Francis Pangilinan, who filed a measure seeking to allow the suspension of fuel excise taxes during times of global or national crises.

With the new law now in effect, attention shifts to how and when the government will exercise its authority to mitigate the impact of future fuel price increases.

Will the new law be enough to shield consumers from future fuel price spikes?

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