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MANILA, Philippines — Amid the raging conflict in the Middle East and its anticipated impact on consumer oil prices, President Marcos is eyeing “special powers” from Congress to lower the excise tax on fuel.
“I am going to talk to the leaders in both the House and in the Senate. This is not yet a sure thing, but this is something that we are discussing and it could be helpful – is to give me, the President, the authority to reduce excise tax on petroleum products should Dubai crude exceed $80 per barrel,” he told a press conference at Malacañang yesterday.
“We’re not there yet. But if in case that happens, then maybe this is something that we will have to – this is one tool that we will have to have,” Marcos said.
He stressed that the option to reduce excise tax is “an emergency measure.”
“I will discuss it with the leadership of Congress and to see if it’s going to be an emergency measure. It is not going to be a permanent measure. It will be something that we will dispose of as soon as the crisis is over,” he said.
The press conference was held after the President’s special meeting with his Cabinet at the Palace.
Present at the press conference held at the Kalayaan Hall were Executive Secretary Ralph Recto, Energy Secretary Sharon Garin, Defense Secretary Gilbert Teodoro Jr., Foreign Affairs Secretary Ma. Theresa Lazaro, Finance Secretary Frederick Go, Department of Economy, Planning, and Development Secretary Arsenio Balisacan and Migrant Workers Secretary Hans Leo Cacdac.
The President said the price of the Dubai crude oil – used as benchmark for Asia – briefly hit $82 but closed at $76.50 per barrel.
“We cannot know – we have heard many estimates how long this will last. What we heard coming out of the United States is four to five weeks. Hopefully, it will be less,” the Chief Executive said.
However, in a scenario where the price of Dubai crude oil breaches the $80-$90 per barrel and stays within that range for two months and assuming that Iran exports continue, the government would roll out targeted fuel subsidies to the affected areas such as the transportation and agriculture sectors, Marcos said.
Go, meanwhile, clarified the “emergency powers” the President might seek from Congress may have to be granted if the Dubai oil exceeds $80 per barrel for “a certain period of time.”
“And again, even if it exceeds $80 per barrel, doesn’t mean we react right away. It also has to exist for a certain period of time,” he said, without elaborating.
In a separate statement, Go said “the Economic Team will work with Congress to secure authority for the President to temporarily reduce excise taxes on fuel should the price of Dubai crude oil exceed $80 per barrel.”
Enough oil supply
Likewise, Marcos assured the public of adequate oil supply, as he raised an appeal for the adoption of energy conservation measures given the uncertainty of the situation in the Middle East.
“First of all, let me assure everyone that we have sufficient supply of oil. We have a stockpile that are approximately 50 to 60 days in terms of gasoline, in terms of fuel oil and in terms of kerosene,” he said.
“So, that is – let me immediately allay the fears of everyone that the oil supply of oil-derived products – of oil products even fertilizer, something that we have to look at. And we have sufficient supply,” Marcos added.
The President also directed national government offices and the public to adopt similar energy-saving measures.
“All of these things can come together. We will give further guidance. We will make public service announcements to make suggestions to people what else they can still do to reduce energy use,” he said.
Garin said the government has secured commitments from oil firms to take sufficient action to mitigate the impact of soaring fuel prices on motorists.
The Department of Energy has also directed state-run Philippine National Oil Co. to look for other possible fuel sources to support oil companies should the conflict in the Middle East further escalate, Garin noted.
Although the Philippines’ only remaining refinery in Bataan has not historically sourced crude oil or unrefined petroleum from Iran, around 98 percent of its imports come from other Middle Eastern countries such as Saudi Arabia, United Arab Emirates, Iraq, Kuwait and Qatar. Garin expects fuel prices to rise even further next week.
Show of support
Several senators and congressmen have already shown support for the lowering of excise tax on fuel.
“I am in favor of granting the President those powers to be able to lower the excise tax on fuel. That move will definitely help cushion the impacts on high fuel cost due to the ongoing conflict in the Middle East,” Senate Majority Leader Juan Miguel Zubiri said.
Sen. Erwin Tulfo, at a press briefing yesterday, said lawmakers are representatives of the people, and thus should support measures that would benefit the majority.
“This is so our countrymen will not be too burdened. Which lawmaker will dare not to support this?” he said.
For Senate President Vicente Sotto III, the country still has two to three months oil reserves that could help mitigate price shocks.
“We might be worried about something that we should not be worried about. In the meantime, we will study this,” Sotto said.
Senate President Pro Tempore Panfilo Lacson said the proposed law “should only authorize, not mandate, the Department of Finance to suspend the excise tax,” and that the proposed move should “not be automatic.”
For his part, Sen. Sherwin Gatchalian said the proposal should be studied further due to an expected revenue loss.
Administration congressman Miro Quimbo (Marikina 2nd district) backed Marcos’ plan: “Now is the time to prepare before prices surge further.”
Quimbo filed House Bill (HB) 8257, seeking to grant President Marcos the authority to suspend or reduce excise tax on petroleum products during national or global economic emergencies.
Meanwhile, Navotas Rep. Toby Tiangco introduced a joint House and Senate resolution urging Marcos to temporarily suspend the collection of Value-Added Tax (VAT) on all fuel products.
House Assistant Minority Leader and Gabriela Women’s Party Rep. Sarah Elago said both excise tax and VAT on oil should be scrapped.
“At a time when wages remain low and inflation continues to erode household incomes, the government must act decisively. Scrapping the excise tax and VAT on oil is an urgent and concrete measure to provide immediate relief to the public,” she pointed out.
Former Bayan Muna representative Carlos Isagani Zarate urged Congress to pass four pending bills, designed to “shield Filipino consumers from the coming oil price storm.”
He identified them as HB 8125 which aims to regulate the downstream oil industry, HB 8126 which seeks the establishment of a centralized procurement of oil, HB 8127 seeking to “renationalize” Petron Corp., and HB 8128 on the unbundling of oil prices.
Meanwhile, Vice President Sara Duterte has a unique take on the matter, calling instead on all local government units to ban motorcades and caravans to save fuel.
“These events (motorcades) not only lead to higher fuel costs but also worsen air pollution and increase traffic congestion, causing significant inconvenience to everyone,” she said in a statement yesterday. — Aubrey Rose Inosante, Delon Porcalla, Jose Rodel Clapano, Marc Jayson Cayabyab, Brix Lelis, Bella Cariaso
