EXPLAINER: Marcos Signs Law to Suspend Excise Tax—What Does It Mean for Gas Prices?

(SPOT.ph) President Ferdinand “Bongbong” Marcos Jr. has finally signed Republic Act No. 12316, a law that allows him to temporarily suspend or reduce excise taxes on petroleum products. But don't think it's as straightforward as it sounds. What kind of price cut are we really looking at?

To understand this, it helps to first break down what excise tax actually is.

An excise tax is a specific tax imposed on certain goods, usually charged per unit rather than as a percentage of the price. In simple terms, it’s a fixed amount added to products like alcohol and tobacco, regardless of how much they already cost in the market. For fuel, that means the tax is built into every liter sold in the Philippines.

Under current rates, motorists pay P10 per liter on gasoline and P6 per liter on diesel under the Tax Reform for Acceleration and Inclusion (TRAIN) law.

This is where the new law comes in. If the government suspends the excise tax in full, a gasoline user with a 40-liter tank could save P400 on one full tank. A diesel user with a 60-liter tank could save P360. That’s huge for households that fill up several times a month. The impact also goes beyond private cars—diesel powers buses, jeepneys, trucks, and deliveries, which means it affects fares, goods, and food prices.

However, that kind of relief doesn’t come without a cost. The Department of Finance (DOF) said that suspending the excise tax will result in a P136 billion revenue loss in 2026.

Also read: How Close Are We to Running Out of Fuel in the Philippines?

A quick clarification: This does not mean fuel prices will automatically go down now that the law is signed. It just gives Marcos the authority to—but only if certain conditions are met, specifically if the average Dubai crude oil price reaches at least $80 per barrel for one month. He can choose between a full suspension and a partial cut.

Any relief isn’t permanent. The law allows a suspension or reduction for up to three months at a time, with a total cap of one year. Rates automatically return either a week after Dubai crude falls below $80 per barrel (as certified by the Department of Energy) or after three months—whichever comes first. Marcos can exercise this power until December 31, 2028.

For context, Dubai crude prices have already moved far beyond the $80 trigger, rising to around $127 to $130 per barrel in mid-March 2026 based on trading data. Locally, fuel prices are already surging, with the DOE projecting pump prices for the March 24 to 30 cycle to reach as high as P112.40 per liter for gasoline and P134.30 per liter for diesel. We'll have to wait and see when Marcos decides to put this law into effect.

If you’re looking to cut fuel costs further, here are driving tips that can help you save because every peso saved counts right now.

Also read: This Website Shows You Nearby Gas Stations With the Cheapest Prices