MANILA, Philippines — September 25, 2026 — President Ferdinand R. Marcos Jr. has issued Executive Order No. 125, temporarily suspending excise taxes on liquefied petroleum gas (LPG) and kerosene as elevated global oil prices continue to put pressure on households and consumers.
The order comes after the Department of Energy (DOE) certified that the average price of Dubai crude oil based on the Mean of Platts Singapore (MOPS) reached US$99.41 per barrel over the 30-day period covered by the certification.
That figure is significantly above the US$80-per-barrel threshold established under Republic Act No. 12316, the law that gives the President authority to temporarily suspend or reduce excise taxes on selected petroleum products when international oil prices reach specified levels.
What Executive Order No. 125 Does
Under EO 125, the excise taxes on LPG and kerosene are fully suspended, subject to specific exceptions.
For LPG, the suspension does not cover products used as raw materials in the production of petrochemical products or LPG used for motive power.
For kerosene, the suspension does not apply when the product is used as aviation fuel.
This means the measure is targeted specifically at covered LPG and kerosene products rather than being a blanket suspension of petroleum excise taxes.
The government's decision follows the framework established by RA No. 12316, which allows the President, upon recommendation of the Development Budget Coordination Committee (DBCC) and in coordination with the DOE, to temporarily suspend or reduce petroleum excise taxes when the Dubai crude MOPS average reaches or exceeds US$80 per barrel.
Why the $99.41 Oil Price Matters
The $99.41-per-barrel figure is important because it satisfies the price condition established by RA No. 12316.
According to recent reporting, the DOE certified that Dubai crude averaged $99.41 per barrel from August 13 through September 11, 2026. The DOE transmitted the certification to the DBCC for consideration.
The law does not automatically eliminate fuel taxes whenever the $80 threshold is reached. Instead, the threshold allows the government to consider a suspension or reduction, subject to the required recommendation and presidential action.
The current measure therefore represents a targeted response to elevated international oil prices.
How Much Excise Tax Is Being Suspended?
The suspension removes the applicable excise tax on covered LPG and kerosene products.
Based on the rates cited by the Department of Finance, the suspended excise tax represents ₱3.36 per kilogram of LPG and ₱5.60 per liter of kerosene.
The actual amount consumers see in retail prices, however, may not necessarily match the full tax amount on a one-for-one basis. Retail prices can also be affected by international petroleum prices, exchange rates, transportation costs, distribution expenses, inventories, and other market factors.
For households that regularly purchase LPG for cooking, the suspension can therefore affect the tax component of the price of a refill. Kerosene users may likewise see the tax component removed from covered products.
Gasoline and Diesel Excise Taxes Are Not Suspended
One important point in EO 125 is what it does not cover.
The order does not suspend the excise taxes on gasoline or diesel.
Recent reporting said the DBCC decided against suspending those taxes, with Finance Secretary Frederick Go citing the fiscal implications and the assessment that removing the taxes on gasoline and diesel would be less progressive. BusinessMirror reported that suspending those taxes could result in approximately ₱12 billion in monthly foregone government revenue.
As a result, motorists should not interpret EO 125 as a general fuel-tax holiday covering all petroleum products.
The measure is specifically focused on covered LPG and kerosene.
How Long Will the Suspension Last?
EO 125 provides for an automatic reversion mechanism.
Under the order, the regular excise tax rates under Section 148 of the National Internal Revenue Code, as amended, will automatically return when either of two conditions occurs.
The first is one week after the one-month average Dubai crude oil price based on MOPS falls below US$80 per barrel, as certified by the DOE.
The second is three months after the effectivity of the executive order.
Whichever condition occurs first will trigger the return of the regular excise tax rates.
This makes the measure temporary rather than a permanent change to the country's petroleum tax system.
Government Agencies Ordered to Monitor the Measure
EO 125 also establishes monitoring and reporting requirements.
The DOE and the Department of Finance, through the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC), are directed to conduct an inventory of existing LPG and kerosene stocks as of the order's effectivity.
The BIR and BOC must also submit monthly information to the House of Representatives concerning the declared value and volume of petroleum products covered by the suspension.
Meanwhile, the DOE is directed to require oil companies to submit monthly information about the cost components of covered petroleum products during the suspension period.
These requirements are intended to provide government officials and lawmakers with information that can be used to monitor the measure and evaluate its effects.
Monthly Review Could Change the Policy
The suspension is also subject to periodic review.
Under EO 125, the DBCC, in coordination with the DOE, must review implementation within 15 days from the issuance of the order and every month afterward.
The DBCC may then recommend to the President that the suspension be continued, modified, extended, or terminated.
This means the policy can change depending on developments in international oil prices and the government's assessment of the measure.
Republic Act No. 12316 generally limits an individual suspension or reduction to a maximum of three months, while also providing an aggregate annual limit.
What Consumers Should Watch Next
For households and businesses, the most important developments to watch are the actual retail prices of LPG and kerosene following implementation of the suspension.
Consumers should also distinguish between the excise tax suspension and movements in international oil prices. Removing a tax does not prevent petroleum prices from changing because of global crude prices, regional refined-product prices, exchange rates, and other market conditions.
The government will also continue monitoring Dubai crude prices through the MOPS benchmark. If the applicable average falls below the statutory threshold, EO 125 provides for automatic reversion of the regular excise tax rates.
Bottom Line
Executive Order No. 125 temporarily suspends excise taxes on covered LPG and kerosene products as the Philippines responds to elevated international oil prices.
The measure follows the DOE's certification of a US$99.41-per-barrel average Dubai crude price, well above the US$80 threshold established by RA No. 12316.
For consumers, the measure specifically affects the tax component of covered LPG and kerosene products. It does not suspend excise taxes on gasoline and diesel.
The suspension is temporary, subject to monthly review, and designed to automatically end when the specified oil-price or three-month conditions are reached.
As implementation begins, the key issue for consumers will be how quickly the tax suspension is reflected in actual retail prices and how international oil markets move during the coming weeks.



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