Manila, March 25 (AseanAll)  — Philippine President Ferdinand R. Marcos Jr. has signed into law a measure authorizing the suspension or reduction of excise taxes on petroleum products once global oil prices reach a set threshold, providing the government with a key tool to cushion the impact of rising fuel costs on the economy.

Republic Act 12316 allows the President, upon recommendation of the Development Budget Coordination Committee (DBCC) and in coordination with the Energy Secretary, to suspend or reduce fuel excise taxes if Dubai crude oil price reaches or exceeds US$80 per barrel for one month.

The law states that any suspension or reduction of fuel excise taxes can only last up to three months, but not more than one year in total, and taxes will automatically return to their original rates either one week after the one-month average Dubai crude oil price drops below US$80 per barrel, as certified by the Department of Energy, or after three months—whichever comes first.

“The power of the President to temporarily suspend or reduce the excise tax on petroleum products granted under this Section shall be exercised only until December 31, 2028,” the law stated.

The executive branch must also report to Congress the basis and goals for reducing or suspending excise taxes, including expected revenue losses, effects on households, impact on inflation and fuel prices, cost-benefit analysis, and any possible market distortions or unintended consequences.

“The report shall include a recommendation on whether the suspension or reduction of excise taxes should be maintained, modified, or lifted, and shall form part of the basis for any continued suspension or reduction,” the law read.

Oil companies will also be required to submit to the DOE monthly data on the cost components of the price of petroleum products sold.

The law shall take effect 15 days after publication in the Official Gazette or a newspaper of general circulation.