Great news for our wallets!No more oil price hikes?
By Atty. Angelica P. Avelino
REPUBLIC ACT NO. 12316: AN ACT AUTHORIZING THE PRESIDENT TO SUSPEND OR REDUCE EXCISE TAX ON PETROLEUM PRODUCTS, AMENDING FOR THE PURPOSESECTION 148 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED
On March 25, 2026, President Ferdinand Marcos Jr. signed Republic Act No. 12316, which took effect on April 9, 2026, granting authority to the President to temporarily suspend or reduce excise taxes on petroleum products.
Under this new law, the President is granted the power, upon recommendation of the Development Budget Coordination Committee (DBCC) and in coordination with the Secretary of Energy, to temporarily suspend or reduce the excise taxes on petroleum products when the average Dubai crude oil prices, based on the Mean of Platts Singapore (MOPS), reach or exceed eighty US dollars (USD 80) per barrel for one month immediately preceding a suspension or reduction order. The President has authority to exercise this temporary power only until December 31, 2028.
These reductions or suspensions apply to specific petroleum products for up to three months, with a maximum aggregate of one year. Furthermore, tax rates will automatically revert to their original prices upon the expiration of the three-month period or if the one-month average price of Dubai crude oil falls below USD 80 per barrel for one week, whichever occurs first.
The President is mandated to submit a report to Congress detailing the factual basis, policy goals, estimated lost revenues, and the expected impact on inflation and fuel prices.
Likewise, oil companies must submit monthly data to the Department of Energy (DOE) regarding the cost components of their petroleum prices. The DOE, Bureau of Internal Revenue, and Bureau of Customs are also required to submit monthly information regarding petroleum volumes and values affected by the tax changes.
This vital government initiative serves as a much-needed lifeline for public utility vehicle drivers, daily commuters, and small business owners. The newly passed law creates a strategic safety net for an economy greatly affected by the continuous global oil price crisis and ensures that petroleum prices do not rise higher than necessary in the country.
