Manila: The suspension of excise tax on kerosene and liquefied petroleum gas (LPG) is set to provide relief to both the poorest households and middle-income families, announced Finance Secretary Frederick Go on Tuesday. This measure aims to assist families and small businesses, including eateries, in managing their daily cooking and energy needs by offering savings of approximately PHP6.96 per 11-kg LPG cylinder and PHP5.56 per liter of kerosene.

According to Philippines News Agency, President Ferdinand R. Marcos Jr. issued the order to suspend the excise tax on Monday. This decision comes as part of efforts to mitigate the impact of rising fuel prices driven by the ongoing conflict in the Middle East. The Development Budget Coordination Committee (DBCC) recommended the policy following a comprehensive review.

"This relief is focused on the most vulnerable," Go stated, highlighting the importance of targeting support where it is most needed. Data from the Philippine Statistics Authority indicates that 48 percent of kerosene consumption occurs within the bottom 30 percent of households, while the majority of LPG users fall within the bottom 70 percent. This suggests that the policy will benefit not only the poorest households but also middle-income families, allowing them to allocate more resources towards food, education, and healthcare.

Go further explained that the DBCC determined suspending excise taxes on diesel and gasoline would not provide significant relief, as any reduction in retail pump prices would likely be marginal and countered by existing market dynamics. The government will continue to offer targeted subsidies to sectors impacted by rising transport fuel prices, such as public transport operators, drivers, commuters, farmers, and fisherfolk.

Additionally, the DBCC plans to monitor global oil market developments closely and adjust policies as necessary to respond to changing conditions.