As global oil markets face unprecedented volatility driven by ongoing geopolitical conflicts, the pressure on Filipino households, transport workers, farmers, and businesses continues to intensify. Immediate and well-targeted government response is essential.

While the Tax Reform for Acceleration and Inclusion (TRAIN) Law once provided an automatic safeguard to suspend scheduled fuel excise tax increases during periods of high oil prices, that mechanism applied only to the 2018–2020 adjustment period and is no longer available today.

In the absence of this automatic protection, policymakers must act decisively — through targeted fuel subsidies, direct assistance to the most vulnerable sectors, and carefully calibrated relief measures — to cushion the impact of rising oil prices while maintaining fiscal stability.

1. Should the government suspend fuel excise taxes when oil prices surge?

Yes — during extreme oil price shocks, temporary suspension of fuel excise taxes can provide immediate relief to consumers.

However, the safeguard under the TRAIN Law only allowed the suspension of scheduled excise tax increases from 2018 to 2020. Today, there is no automatic mechanism to suspend existing fuel excise taxes.

This means any suspension now requires Congressional action for temporary emergency powers granted to the President.

What citizens should expect: Government must restore a clear mechanism that allows automatic fuel tax relief during global oil crises.

2. What is the fastest way the government can help consumers today?

The fastest and most practical solution is targeted fuel subsidies and direct assistance to the most affected sectors.

Instead of suspending taxes for everyone, targeted support can immediately help public transport drivers, farmers, fisherfolk, and low-income households who are hit hardest by rising fuel prices. (READ: How are Filipino farmers, fishers affected by the Middle East crisis?)

Possible relief measures include:

• Fuel subsidies for transport drivers, farmers, and fisherfolk
• Cash assistance for minimum-wage earners and vulnerable families
• Targeted tax relief for middle-income workers
• Temporary transport support, such as free rides for low-income commuters

What citizens should expect: Immediate assistance directed to those most affected by rising fuel costs.

3. When should government activate fuel relief measures?

Relief programs should be triggered by clear economic indicators — not politics.

The government should activate targeted assistance when:

• Inflation reaches 6% or higher, or
• Average fuel prices exceed P80 per liter nationwide.

Excise tax suspension may be considered when:

• Global oil prices reach about US$90 per barrel for a sustained period, or
• Major geopolitical disruptions severely affect the global oil supply.

What citizens should expect: Transparent and automatic relief measures that protect households and businesses during periods of extreme oil price volatility.

Ultimately, the choice between fuel excise tax suspension and targeted subsidies should not be framed as an either-or solution. Both are legitimate policy tools that can help cushion the impact of rising oil prices — but they must be deployed strategically and at the right time. Targeted subsidies can provide immediate relief to the most vulnerable sectors, especially transport workers, farmers, and low-income households affected by rising food and transport costs. Excise tax suspension, on the other hand, may be warranted during severe global oil shocks when broader relief is necessary.

What matters most is that the government acts swiftly, transparently, and based on clear economic triggers — such as rising inflation or sustained global oil price spikes. In times of global uncertainty, timely and well-designed relief measures are essential not only to protect Filipino families but also to keep the broader economy resilient. – Rappler.com

Mon Abrea is a Global Tax Policy Expert and Chief Tax Advisor of the Asian Consulting Group (ACG), the Philippines’ premier tax advisory and investment consulting firm — providing strategic tax, energy, and policy advisory services to governments, multinationals, and investors. For guidance on energy taxation or subsidy programs, CONSULT ACG, or email [email protected] for seminars and briefings across Asia, Middle East, Oceania, Europe, and North America.