F

Excise Tax on
Petroleum Products
in the Philippines
The implementation of the Tax Reform for Acceleration
acts
and Inclusion (TRAIN) law (RA 10963) increased the in
igures
excise tax rates on all petroleum products including oil
and fuel in three (3) tranches beginning January 1, 2018
to January 1, 2020.

The law provides that the scheduled increase in the

excise tax on fuel for the said period shall be suspended Congressional Policy and Budget Research Department
when the average Dubai crude oil price based on Mean House of Representatives
February 2022 (No. 13)
Platts Singapore (MOPS) for three (3) months prior to
the scheduled increase of the month reaches or exceeds
US$ 80 per barrel.
Volume of Removals. Table 2 shows the volume of
Excise Tax Rates on Petroleum Products. Table 1 removals (VOR) of petroleum products in liters and
presents the specific tax rates on petroleum products kilograms. From 2018 to 2020, total VOR of taxable
under the TRAIN law from 2018 to 2020. Note that in the removals of products in liters (L) significantly dropped
said period, highest increases in excise tax are on diesel from 9,303.7L in 2018 to 3,421.4L in 2020 or by 63.2%.
fuel oil, liquefied petroleum gas, and bunker fuel oil Cumulative decrease of total VOR can be attributed
(from P2.5 to P6.0). These product types are commonly to decline of diesel (3,007.4L) followed by gasoline
used for automotive, heating appliances and maritime (2,075.1L) and bunker fuel oil (619.1L) in the same
vessels. Meanwhile aviation gas and kerosene used for years. Meanwhile total VOR of taxable removals in
aviation fuel remained at P4.0 in the same years. kilograms (kgs) also plummeted from 531.9 kgs in 2018
to 142.2 kgs in 2020 or by 73.3% due mainly to decrease
in the VOR of LPG in the same period (380.9 kgs).
Table I. Excise Tax Rate on Petroleum Products,
(In Pesos per Liter or Kilogram)
2018-2020 Table 2. Volume of Removals, 2018-2020
Effectivity of RA 10963 Petroleum Increase/
2018 2019 2020
Increase Products Decrease
Jan. Jan. Jan.
Product Type in Gasoline (L) 3,186.7 2,341.7 1,111.6 ( 2,075.1)
1, 1, 1,
Excise
2018 2019 2020 Kerosene (L) 61.2 45.8 34.7 (26.5)
Tax
Lubricating oils and greases
Diesel (L) 5,209.2 3,573.7 2,201.8 (3,007.4)
(L)
Processed gas (L or kg) Avturbo (L) 224.9 176.4 70.7 (154.2)
8.0 9.0 10.0 2.0
Waxes and petrolatum (kg)
Bunker Fuel
Denatured alcohol (L) 621.8 584.9 2.7 (619.1)
Oil (L)
Asphalt (kg)
Naphtha, regular gasoline, Total (liters) 9,303.7 6,722.5 3,421.4 (5,882.3)
pyrolysis gasoline and other
similar products of distillation Bitumin (kgs) 9.1 13.5 0.3 (8.7)
7.0 9.0 10.0 3.0
(L)
Unleaded premium gasoline LPG (kgs) 522.8 281.6 141.9 (380.9)
(L) Total (kgs) 531.9 295.1 142.2 (389.6)
Kerosene(L) 3.0 4.0 5.0 2.0
Aviation turbo jet fuel, aviation Source of basic data: BIR LT Performance Monitoring & Programs Division
gas (L)
4.0 4.0 4.0 -
Kerosene when used as
aviation fuel (L) Excise Tax Collection from Petroleum Products.
Diesel fuel oil, and on similar Figure 1 represents the total excise tax collection of
fuel oils having more or less
the same generating power the Bureau of Internal Revenue (BIR) from petroleum
Liquefied petroleum gas used
for motive power (kg) 2.5 4.5 6.0 3.5
products. On average, the total excise tax collection
Bunker fuel oil, and on similar from petroleum products for 2018-2020 amounted to
oils having more or less the
same generating power (L) P35,050.8 million. Total year-on-year collection grew
Petroleum coke (MT) by P2,799.3 million or 7.3% in 2019. However, in 2020,
Liquefied petroleum gas (kg) 1.0 2.0 3.0 2.0 revenue collection declined by P16,134.1 million or 39%.
Source of basic data: BIR Website Petroleum products on which excise tax collections
significantly dropped are: bunker fuel oil (P2,632.0M to Figure 3. Philippine Gasoline Prices,
(In Php/Liter)
P16.2M or 99.4%), premium/unleaded/regular January 2021-January 2022
gasoline (P21,074.9M to P11,115.6M or 47.3%), diesel
70.0 66.6
(P16,081.7M to P13,210.6M or 17.8%) and Avturbo 62.1 61.6
59.6
(P705.8M to P282.8M or 60%). 60.0 53.2 52.2 51.7 53.7 55.2
56.2 55.7
50.2 50.7
50.0
Figure 1. BIR Excise Tax Collection from
Petroleum Products, (In Million Pesos) 40.0
2018-2020
30.0
45,000.0 41,362.0
38,562.6 20.0
40,000.0
35,000.0 10.0

30,000.0 0.0
25,227.9
25,000.0
20,000.0
15,000.0 Source of basic data: tradingeconomics.com, Department of Energy Philippines
10,000.0 BSP 2021 Ave. Exchange Rate US$1=49.2546, Jan. 2022 Ave.=51.2353

5,000.0
- Prices of Gasoline and Diesel in Selected ASEAN
2018 2019 2020
Countries Inclusive of Excise Tax. As shown in Table
Source of basic data: BIR LT Performance Monitoring & Programs Division
3, the excise tax on gasoline and diesel constitutes 4.5%
Ratio of Excise Tax Collection of Petroleum to 30.6% or an average of 18.6% in ASEAN countries,
Products to Total Excise Tax Collections; to Total with Laos having the highest ratio at 30.6%. The
BIR Collections, and GDP. Figure 2 indicates that Philippines (PH) has the third lowest excise tax rates on
despite the increase in the excise tax of most petroleum gasoline which is below the ASEAN average excise tax
products in 2020, the ratio of excise tax collection of of P13.8 per liter. On the other hand, the excise tax is
petroleum products to total excise tax collection declined 4.5% to 35.2% of the price of diesel in the ASEAN, or
from 13.3% in 2018 to 8.5% in 2020, to total BIR an average of 17.3% with Singapore having the highest
collection from 2.0% to 1.3%, and to GDP from 0.2% to ratio at 35.2%. The PH has the second lowest excise tax
0.1% during the period. on diesel, below the ASEAN average excise tax of P10.7
per liter.
Figure 2. Ratio of BIR Excise Tax Collection
of Petroleum Products to Total Excise Tax
Collections, Total BIR Collections and GDP, Table 3. Gas Price of Gasoline and Diesel in
2018-2020 Selected ASEAN Countries inclusive of
Excise Tax, 14 February 2022
Estimated
Ratio of
Gas Excise
Excise
Country Price* PhP Excise Tax Tax per
Tax to
US$1** Liter
Price (%)
(Php)
Gasoline
Laos 1.342 68.9 34% 21.1 30.6
Singapore 1.986 101.9 S$7.90* 30.1 29.5
Vietnam 1.096 56.3 VND4000*** 9.2 16.4
Philippines 1.213 62.3 P10.0 10.0 16.1
Thailand 1.342 68.9 THB6.5 10.2 14.8
Indonesia 0.887 45.5 5% 2.0 4.5
Source of basic data: BIR Annual Reports 2018-2020
Diesel
Singapore 1.678 85.6 S$7.90* 30.1 35.2
Philippine Gasoline Prices. In 2021, gasoline prices Laos 1.044 53.3 24% 11.6 21.7
averaged P55.2 per liter. As shown in Figure 3, Philippine Thailand 0.936 47.8 THB6.4 10.1 21.2
Vietnam 0.840 42.9 VND2000*** 4.6 10.7
gasoline prices reached an all-time high of P62.1 per liter
Philippines 1.134 57.9 Php6.0 6.0 10.4
in October of 2021 and a record low of P50.2 per liter in Indonesia 0.874 44.6 5% 2.0 4.5
January of the same year. In January 2022, gasoline ** BSP Exchange rate, US$1= 51.029, SGD1=38.1231, THB1=1.5707,
price reached P66.6 per liter surpassing the level of oil Feb. 14, 2022
***https://fxconvert.net/converter/vnd-php/1, 1VND=0.0023PhP, Feb 14, 2022
price hike in 2021. Source of basic data:* https://www.globalpetrolprices.com/ao14Feb2022