Philippines cuts tax on petroleum products to ease price shock

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MANILA: Philippine President Ferdinand Marcos announced on Monday that excise taxes on LPG and kerosene will be reduced to mitigate the economic impact of the US-Israeli war on Iran. This decision follows the failure of peace talks between the United States and Iran, prompting the government to intervene to assist citizens facing rising costs.

The tax cuts focus on products essential to daily life, such as cooking fuels. Starting Tuesday, the price of liquefied petroleum gas (LPG) will decrease by 3.36 pesos per kilogram. Additionally, kerosene prices, which are vital for lower-income households, will drop by 5.60 pesos per litre.

Further relief measures are being considered as the conflict continues to disrupt global energy supplies. President Marcos will meet with a crisis committee to discuss potential tax adjustments for gasoline and diesel. These fuels are critical for public transport, yet diesel prices have already doubled to 145 pesos per litre since the war began.

The Philippines remains highly vulnerable to these price shocks because it relies on oil imports that pass through the now-closed Strait of Hormuz. Beyond fuel, the war has driven significant inflation, with food prices in March rising nearly twice as fast as the previous month.