Solon: Congress mulling over giving President powers to suspend fuel tax hike

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Quirino Rep. Dax Cua.

Metro Manila (CNN Philippines, May 30) — Congress is mulling over giving President Rodrigo Duterte the power to suspend the tax increases on fuel, House Ways and Means Committee Chair Rep. Dakila Cua said Wednesday.

"We will now come up with a bill that would perhaps authorize the executive to temporarily suspend the ₱2.50 that's already in place," Cua told CNN Philippines' The Source.

The bill is still being conceptualized, but whether the President would approve it stands to be seen.

Malacañang Palace previously said it would leave the suspension of the Tax Reform for Acceleration and Inclusion (TRAIN) law, or Republic Act 10963 to Congress. But it also warned suspending the law could have adverse effects on other government programs.

READ: Malacañang leaves TRAIN suspension to Congress

Lawmakers are calling for the suspension in light of rising prices of oil and other goods. Higher fuel excise tax is one of the provisions in the TRAIN law.

READ: Poe joins call for fuel excise tax suspension

TRAIN's provisions allowed the prices of regular and premium unleaded gas to go up by ₱7 per liter this year.  It will rise by ₱9 in 2019, and ₱10 in 2021.

Meanwhile, the prices for diesel and fuel for public transportation increased by ₱2.50 per liter in 2018, and will rise by ₱4.50 in ₱019 and ₱6 in 2020. Prices for liquefied petroleum gas (LPG) rose by ₱1 per kilogram and will rise another peso annually until 2020, due to the excise tax hike.

The Department of Finance (DOF) stressed that fuel excise tax can only be suspended if the price of international oil averages at $80 a barrel in a period of three months under the current law. Current prices for both Brent crude oil and Dubai crude oil — benchmarks of global oil averages —  teeter around the $75 per barrel mark.

Despite price hikes, the DOF maintains that tax hikes only accounted for ₱2.80 out of the ₱10.20 rise in fuel as well as only 0.4 of the 4.5 percent inflation rate.

READ: DOF: TRAIN Law not the primary cause of five-year high inflation

The department also said only the next scheduled increase in fuel excise tax could be suspended - and that's still in January 2019.

But the bill being formulated by lawmakers may allow the President to suspend even fuel tax increases already in place under TRAIN, Cua said.

The congressman said suspending the fuel excise tax hike may be necessary if there are further delays in the rollout of programs to cushion TRAIN's impact on the poor.

READ: Solon: Congress may suspend portions of TRAIN if rollout of social protection programs still delayed

Meanwhile, the Department of Energy has begun efforts to import diesel from Russia, in hopes of curbing oil prices in the country.

READ: PH to import cheaper diesel from Russia

CNN Philippines Senior Correspondent Ina Andolong contributed to this story.