𝗖𝗲𝗻𝗣𝗘𝗚: 𝗦𝘂𝘀𝗽𝗲𝗻𝗱𝗶𝗻𝗴 𝗘𝘅𝗰𝗶𝘀𝗲 𝗧𝗮𝘅 𝗼𝗻 𝗢𝗶𝗹 𝗪𝗶𝗹𝗹 𝗛𝗮𝘃𝗲 𝗟𝗶𝗺𝗶𝘁𝗲𝗱 𝗜𝗺𝗽𝗮𝗰𝘁, 𝗩𝗔𝗧 𝗦𝗵𝗼𝘂𝗹𝗱 𝗯𝗲 𝗥𝗲𝗺𝗼𝘃𝗲𝗱, 𝗢𝗶𝗹 𝗗𝗲𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻 𝗟𝗮𝘄 𝗥𝗲𝗽

The proposal of the administration of Ferdinand Marcos Jr. and Congress to temporarily suspend the excise tax on petroleum products in response to rising oil prices will have only limited impact and does not address the root causes of the country’s oil price crisis, according to Prof. Roland Simbulan, Chairperson and Fellow of the think tank Center for People Empowerment in Governance (CenPEG).

Simbulan explained that while the proposed suspension is being presented as an immediate relief measure for consumers, its actual effect on pump prices will be minimal.

“The excise tax on diesel is only about ₱6 per liter. Even if this is completely suspended, the price of diesel will fall by only around ₱6 per liter,” Simbulan said. “If diesel is currently priced at around ₱100 per liter, removing the excise tax will only bring it down to about ₱94 per liter. Compared to previous price levels of around ₱58 per liter, most of the increase—about ₱42 per liter—will still remain,” he added.

According to Simbulan, this means that even with the suspension of the excise tax, fuel prices will remain significantly high and the burden of the oil price crisis will continue to fall on consumers.

“The main driver of rising fuel prices is the deregulated structure of the oil industry under the Oil Deregulation Law of 1998,” Simbulan said.

Under the current system, oil companies are allowed to freely set prices based on movements in the global market. This arrangement allows companies to quickly pass on price increases to consumers while protecting their profit margins.

“In this context, suspending the excise tax becomes largely a symbolic measure. It allows the government to show that it is taking action against rising oil prices, even if the actual impact on consumers is limited and temporary,” Simbulan said.

He added that if the government is truly serious about easing the burden on consumers, it should not limit the discussion to excise taxes.

“Why is the suspension of the value-added tax (VAT) on petroleum products not being seriously considered, when VAT represents a much larger portion of the tax component in fuel prices?” Simbulan asked.

He said Congress could go beyond suspending excise taxes by also proposing the suspension of VAT on petroleum products and eventually reviewing the continued imposition of VAT on fuel.

At the same time, Simbulan stressed the need to reopen discussions on reviewing or repealing the Oil Deregulation Law of 1998 and conducting stronger investigations into the pricing practices of oil companies.

“In many instances, petroleum products being sold in the market come from stocks imported earlier and stored before new geopolitical tensions or price spikes occur. Yet local prices are raised immediately, raising questions about pricing practices,” he said.

Simbulan also pointed out that the oil price crisis cannot be separated from the broader economic disruptions caused by escalating global conflicts and geopolitical tensions that are affecting energy supply and markets worldwide.

In this situation, he said the government must prioritize the welfare of ordinary Filipinos.

He urged the government to rechannel public funds currently allocated to questionable or less urgent expenditures—such as pork barrel-type allocations, confidential and intelligence funds, and large budgets for counterinsurgency programs including the National Task Force to End Local Communist Armed Conflict—toward social services and direct subsidies.

“These funds could instead support targeted subsidies for public utility vehicle drivers, farmers, fisherfolk, and other sectors that are most affected by rising fuel prices, while strengthening social protection programs for poor households,” Simbulan said.

“The public needs more than temporary relief. What is needed are structural reforms that address deregulation in the oil industry and prevent the continued transfer of the oil price crisis to ordinary consumers,” he added.

According to Simbulan, the government must ensure that policies during periods of global economic instability prioritize public welfare over the protection of corporate profits.