Excise tax on LPG and kerosene is back as oil prices fall below trigger level

The BIR resumes collecting excise taxes after the average price of Dubai crude oil dropped below the threshold that had kept the temporary tax suspension in place.

The tax break on LPG and kerosene is over.

The Bureau of Internal Revenue has resumed collecting excise taxes on the two fuels starting July 8 after global oil prices fell below the level required to keep the temporary suspension in place.

The average price of Dubai crude oil in June settled at $79.45 per barrel, below the $80 threshold under Executive Order No. 114, automatically restoring the excise tax rates prescribed by law.

The temporary suspension was introduced in April to help cushion the impact of soaring fuel prices during the US-Iran conflict. With the tax now back in effect, households that rely on LPG for cooking, along with small eateries, food vendors, bakeries, and other businesses that use LPG or kerosene, could eventually face higher operating costs if the tax is passed on through retail prices.

The government, however, has not completely ruled out another suspension. Finance Secretary Frederick Go said economic managers are reviewing oil price forecasts over the next three months before deciding whether to recommend another tax break should Dubai crude oil climb back above the trigger level.

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