LPG Excise Tax Suspension 2026: Your Q4 Gas Cost Now Has Two Answers

If your kitchen, commissary, or plant runs on LPG, your gas cost just changed for the second time this year.

The LPG excise tax suspension 2026 is back. President Marcos signed Executive Order No. 125 on September 25. The BIR circularized it on September 28 through Revenue Memorandum Circular No. 100-2026.

The first round ran from April 17 under EO 114 and ended on July 8, when the excise returned automatically. This round can last up to three months. It can also end sooner.

The New Rates at a Glance

Under Republic Act No. 12316, the President may suspend or reduce excise on petroleum products once the one-month Dubai crude average reaches US$80 per barrel.

The BIR implemented the April round through RR 3-2026. RMC 100-2026 applies EO 125 in relation to that same regulation. As of September 29, 2026, the BIR has not issued a new Revenue Regulation.

The pre-suspension rates come from Section 148 of the National Internal Revenue Code, as set by the TRAIN Law (GMA News reports both rates).

The last column is bigger because VAT is charged on a price that already includes excise. Remove ₱3.00 of excise and the 12% VAT on it goes too: ₱3.00 × 1.12 = ₱3.36. The 12% VAT on the fuel itself stays.

Four uses fall outside the order:

• LPG used as a raw material for petrochemical products
• LPG used for motive power
• Kerosene used as aviation fuel
• Diesel and gasoline

Why the Excise Is Off Again

The Department of Energy certified that Dubai crude averaged US$99.41 per barrel from August 13 to September 11, according to the Presidential Communications Office. That is well above the US$80 trigger in RA 12316.

The Development Budget Coordination Committee (DBCC) recommended the suspension on September 22, as Inquirer reported. The President signed three days later.

Diesel and gasoline were left out. Per Inquirer, the DBCC targeted LPG and kerosene because poorer households use them more heavily.

The excise comes back automatically, with no new order, on whichever happens first, per BusinessWorld’s report on RMC 100-2026:

• One week after the DOE certifies that the one-month Dubai average has fallen below US$80
• Three months after EO 125 takes effect

If crude stays above US$80, the suspension runs its full three months and the excise tax comes back around late December. Last time, the price trigger ended the suspension early, as we covered in our explainer on the July 8 reversion.

The DBCC must review the suspension within 15 days of the order, which is around October 10, and monthly after that, BusinessMirror noted. The DOE, BIR, and Bureau of Customs must also inventory existing LPG and kerosene stocks when the order takes effect.

Who Feels the Difference

F&B operators and food manufacturers. You save about ₱37 per 11-kg tank at an unchanged pre-tax price. A commissary buying 50 tanks a month spends about ₱1,850 less on gas. That saving ends in the same month the excise returns.

Logistics fleets. EO 125 leaves diesel and gasoline alone, so a fleet on those fuels gets nothing from this order.

Timing of the cut. Refiners and importers pay the excise, so the cut reaches you in stages. Suppliers holding stock bought under the tax may not lower prices on day one. In the April round, RR 3-2026 covered only product removed from the refinery or customs custody after the order took effect, so stock already taxed stayed taxed, as ACCRALAW summarized. We could not confirm whether RMC 100-2026 changes that rule.

Other price moves can hide the cut too. LPG Marketers Association founder Arnel Ty told BusinessWorld that an expected October price increase could outweigh the tax saving. That has started to happen. Republic Gas Corp. began a staggered increase of ₱18 per kilo in early October, and Philstar reported on October 4 that it completely offsets the ₱3 cut that took effect at the end of September. Solane and Petron had not announced theirs.

Budgets tend to be built at whichever rate was in force the day someone drafted them. The excise has now flipped twice in one year and carries an automatic trigger. A Q4 budget built at a single rate will probably be wrong in one direction or the other.

What Is Still Unresolved

The order does not define “motive power,” and as of October 5, 2026, we found no BIR clarification of it. Our read is that LPG-fed forklifts are the likeliest gray area, since a forklift is motive power in ordinary usage. Until the BIR clarifies, budget that LPG at the taxed rate and treat any saving as upside.

What to Do Now

1. Check your invoices once your supplier applies EO 125. LPG should drop by about ₱3.36 per kg and kerosene by about ₱5.60 per liter.
2. Rerun your Q4 cost budget at both rates. Cost the same volumes with and without the excise. The swing is ₱36.96 per 11-kg tank.
3. Keep customer pricing flexible. Avoid contracts or menu prices that assume the lower cost lasts a full three months.
4. Watch the DBCC review around October 10 and any DOE certification of the Dubai average. Under RA 12316 and EO 125, either one can change your cost line with about a week’s notice.

Excise sits alongside VAT and percentage tax in your compliance calendar. Our tax compliance guides cover how each one is filed.

Budgeting Around a Tax Break With a Trigger Attached

A tax that switches off on a price trigger and back on a week after a certification is hard to plan around. Your Q4 gas and kerosene line now has two valid answers. Which one applies depends on a Dubai crude average that no SME controls.

We build Q4 cost models that hold up whether the excise stays off or snaps back. That means costing the same volumes at both rates and flagging which contracts and menu prices depend on the lower cost. It also means keeping purchase records dated so the switch is clear in your books.

If you want a second set of eyes on your fuel and gas cost line before the first DBCC review, our team can walk through it with you.

Frequently Asked Questions

Do I need to file anything with the BIR to benefit from the suspension?
No. The refiner or importer pays the excise, so the suspension is applied upstream. Your job is to check that the price you pay reflects it.

Does this change how I record LPG purchases or input VAT?
Record each purchase at the invoice price. Input VAT follows the VAT actually charged on the invoice. It is lower during the suspension because the VAT base no longer includes excise. Purchases made while the tax applied keep their original cost.

How do I tell whether my supplier has passed the cut through?
Compare your per-kilo or per-liter price before and after, and ask your supplier for the price build-up showing the excise line. A smaller drop than ₱3.36/kg or ₱5.60/L can come from stock bought under the tax or an unrelated price increase.

Can the suspension run longer than three months?
EO 125 runs up to three months. After each review, the DBCC may recommend continuing, modifying, extending, or ending it. Any extension would need a further issuance.