THE FUEL EXCISE BILL JUST CLEARED ITS BIGGEST LEGISLATIVE HURDLE YET — IN BOTH CHAMBERS, ON THE SAME DAY

Three things happened on Wednesday, March 11, and they happened fast.

The House of Representatives approved House Bill No. 8414 on second reading through a voice vote, moving a proposal to grant President Ferdinand Marcos Jr. the power to suspend or reduce excise taxes on fuel one step from final passage.

Across the building, the Senate Committee on Ways and Means — chaired by Senator Pia Cayetano — approved "in principle" a parallel set of proposals that would give the President the same authority. Ten Senate bills and one resolution are now under consolidation.

And from New York, Marcos himself confirmed he would certify the bill as urgent.

All three on the same day.

WHAT THE HOUSE PASSED

The bill amends Section 148 of the National Internal Revenue Code. If enacted, it would allow the President to suspend or reduce excise taxes on petroleum products — currently P10 per liter on gasoline and P6 per liter on diesel — under two possible conditions.

First, if the average price of Dubai crude oil reaches or exceeds $80 per barrel for at least one month, based on the Mean of Platts Singapore benchmark.

Second, if the President declares a national emergency or calamity that results in extraordinary increases in domestic pump prices, as certified by the Secretary of Energy.

The suspension would require a recommendation from the Development Budget Coordination Committee — composed of the heads of Finance, Budget, Economic Planning, and the Office of the President — in coordination with the Department of Energy.

Any suspension would last up to six months, extendable to one calendar year through a joint congressional resolution. After that, rates revert automatically. The authority expires on December 31, 2028.

WHAT THE SENATE DID

Cayetano convened the Senate Committee on Ways and Means on Wednesday morning and emerged with a consensus: support "in principle" for granting the President emergency powers on fuel excise.

"In principle, the members who attended are supportive of the main principle of the bill, which is to give emergency powers," Cayetano said after the hearing.

But the Senate is waiting. Cayetano said she will not sponsor a counterpart bill on the floor until the House passes its version on third reading and transmits it — which could happen as early as Thursday.

Several details remain unresolved. The trigger mechanism is still being finalized: at what price threshold does the President gain the authority, and when does it end.

"There are just a few details on when the trigger is," Cayetano said. She said she prefers using a one-month average of oil prices to determine whether the suspension should take effect.

THE REVENUE COST

During the Senate hearing, government officials laid out the fiscal impact. If the excise tax and value-added tax on fuel are fully suspended for calendar year 2026, the estimated revenue loss is approximately P160 billion in excise taxes and P112 billion in VAT — a combined potential loss of P272 billion.

That figure explains the careful calibration in the bill. Full suspension is one option, but the legislation also allows partial reduction, and the President is not required to apply it uniformly across all fuel products.

THE CONTEXT

Diesel prices in the Philippines climbed by P17.50 to P24.25 per liter this week. Gasoline surged by P7.00 to P9.30 per liter. Kerosene rose by P32.00 to P38.50 per liter. These are among the largest weekly increases on record, driven by the ongoing war between the United States, Israel, and Iran.

The Strait of Hormuz — the shipping channel through which roughly 20 percent of the world's seaborne oil passes — remains effectively closed. Iran's Revolutionary Guards have declared it shut. Supertanker freight rates in the Middle East have reached record levels, with very large crude carriers reaching $423,736 per day, according to LSEG data reported by Reuters.

Dubai crude is well above the $80-per-barrel trigger written into the bill. It has not been below $80 since the conflict began in late February.

The Department of Energy warned separately on Monday that electricity rates could increase by as much as 16 percent by April if global fuel prices continue to surge, a figure disclosed by DOE Secretary Sharon Garin.

WHAT COMES NEXT

Third reading in the House is expected as early as Thursday, March 12. Once passed, the bill goes to the Senate, where Cayetano has signaled her committee's readiness to move.

The presidential certification as urgent removes the mandatory three-day interval between second and third reading, allowing the House to act immediately.

If both chambers pass their versions, a bicameral conference committee would reconcile any differences before sending the final version to the President for signing.

No existing law currently grants the President the authority to suspend or reduce excise taxes on fuel during extraordinary circumstances. That is the gap this bill is designed to fill.