DOE: Suspension of oil taxes not allowed by law

MANILA, Philippines — The suspension of taxes for oil imports is not provided for by law, a Department of Energy (DOE) official said Tuesday, June 24, 2025, in response to calls made on this as the Israel-Iran conflict continues to spike global pump prices. INQUIRER FILE PHOTO

MANILA, Philippines — The suspension of taxes for oil imports is not provided for by law, a Department of Energy (DOE) official said Tuesday in response to calls made on this as the Israel-Iran conflict continues to spike global pump prices.

DOE officer-in-charge Sharon Garin made the response after transport groups staged a protest in Quezon City on Tuesday to reiterate their push to abolish the Oil Deregulation law and the suspension of value-added tax and fuel excise taxes.

“That’s in the legislation so the DOE could not go against what is mandated by law, nor DOF (Department of Finance) nor even the President,” Garin said in a regular Palace press briefing, partly in Filipino. “So, we need to follow what’s in the law.”

“It would have to be an act of Congress. An amendment to the current law is needed to either suspend, lower, or even abolish taxes on fuel,” she added.

Garin noted that the law only allows the suspension of tax increases, and not the suspension of the levies.

“Even if the Cabinet is willing, it’s simply not allowed by law,” she said.

She also noted that the taxes on fuel are a major revenue source of the government, breaching the P300 billion mark in 2021 under the “fuel marking program,” which aims to curb oil smuggling.

“If we do away with the P300 billion, how many kilometers of roads, how many school buildings, our health services, will be reduced, because that will reduce the budget of the government,” she said.

Meanwhile, Garin said the DOE will talk to oil firms to call for the continuation of their staggered implementation of the oil price hike next week.

On Monday, major oil firms agreed on a staggered implementation of a big-time five-peso pump price hike in a bid to cushion its impact on consumers.

READ: Oil firms to implement staggered price hikes amid Middle East conflict

A P2.60 per liter price hike was implemented on Tuesday, June 26, and another P2.60 increase will be imposed on June 26, according to Garin.

Firms have yet to announce if the staggered arrangement will continue next week.

The volatility of global pump prices came after Israel’s move to strike the nuclear and military sites in Iran just after midnight on June 13, prompting the latter’s retaliation.

Amidst all this, Iran also floated the possibility of a blockade in the Strait of Hormuz, where a fifth of global oil supply passes through, in a move that would restrict trade and have a further adverse impact on global oil prices.

READ: Iran’s top body to decide on Hormuz closure after parliament approval

“Just pray it won’t,” Garin said of the Strait of Hormuz scenario. “It’s never happened in history.”/coa