The Senate of the Philippines has approved a measure that would allow the president to temporarily suspend or reduce excise taxes on petroleum products during periods of extreme global oil price increases.

The measure, Senate Bill No. 1982, passed on third and final reading on March 16, 2026 with a unanimous 17–0 vote. The bill was principally sponsored by Pia Cayetano and was certified as urgent by Ferdinand Marcos Jr..

The proposed law aims to provide faster relief from rising fuel prices, particularly during global supply disruptions such as those affecting oil markets in recent months.

Power to Temporarily Cut Fuel Taxes

If enacted, the bill would authorize the president to suspend or reduce excise taxes on fuel when global oil prices reach unusually high levels or during national emergencies.

The trigger mechanism would likely rely on benchmarks such as the Dubai crude oil price exceeding a defined threshold (for example, around $80 per barrel over a sustained period).

This approach allows the government to respond quickly to oil price shocks without needing new legislation each time prices spike.

Current Fuel Excise Taxes in the Philippines

Under the Tax Reform for Acceleration and Inclusion Law (TRAIN Law), petroleum products are subject to fixed excise taxes:

• Gasoline: ₱10 per liter

• Diesel: ₱6 per liter

These taxes are included in pump prices and are also subject to the 12% value-added tax (VAT).

Suspending the excise tax would lower the taxable base, meaning consumers could see additional price relief beyond the tax itself.

Possible Impact on Pump Prices

If the excise tax were fully suspended:

• Gasoline prices could drop by as much as ₱10 per liter

• Diesel prices could decrease by around ₱6 per liter.

For example, gasoline priced at roughly ₱65 per liter could potentially fall to about ₱55 per liter, depending on market conditions.

Lower fuel prices could have broader economic effects, including:

• reduced transport fares

• lower delivery and logistics costs

• reduced expenses for farmers and fisherfolk

• modest downward pressure on inflation.

However, the relief would not be immediate. Price adjustments typically take several weeks to be fully reflected at fuel stations.

Temporary and Conditional Measure

The proposed authority is time-bound and intended only for extraordinary situations.

Some versions of the proposal limit each tax suspension period to up to six months, while broader authority could remain available until December 31, 2028.

Once oil prices stabilize, the excise taxes would automatically resume.

Next Legislative Steps

A counterpart measure has already been approved in the House of Representatives of the Philippines

Lawmakers from both chambers will now convene a bicameral conference committee to reconcile differences between the two versions.

After the final text is agreed upon, the bill will be submitted to President Marcos for signature.

Senate Bill No. 1982 seeks to give the Philippine president a rapid-response tool to mitigate fuel price shocks by temporarily suspending excise taxes. If enacted, the measure could help cushion consumers and key sectors from sudden global oil price surges, though the relief would be temporary and dependent on market conditions.