Filipino pump prices carry two embedded taxes: a fixed excise tax per liter (per kilogram for LPG) set by the TRAIN Law, and the 12% VAT computed on a price that already includes that excise. Neither appears as a line on the pump — they are inside the number. This guide unpacks both, the tranche history, why diesel is taxed less, and how the 2026 suspension worked. You can decompose any pump price in our fuel tax calculator.
The rates and how they got there
| Fuel | 2018 | 2019 | 2020–today |
|---|---|---|---|
| Gasoline (per liter) | ₱7.00 | ₱9.00 | ₱10.00 |
| Diesel (per liter) | ₱2.50 | ₱4.50 | ₱6.00 |
| Kerosene (per liter) | ₱3.00 | ₱4.00 | ₱5.00 |
| LPG (per kilogram) | ₱1.00 | ₱2.00 | ₱3.00 |
TRAIN (§148, NIRC as amended) phased the excise in three annual tranches to soften the shock, with the terminal rates taking effect January 1, 2020. Crucially, the final law dropped the automatic annual indexation proposed earlier — so the rates you pay in 2026 are the same ones that took effect in 2020. Diesel and kerosene were taxed lightly (pre-TRAIN: diesel ₱0) precisely because they sit under public transport, farming, and cooking.
The VAT stacked on top: a tax on the tax
Fuel is VAT-registered like almost everything else, at 12%. The subtlety is the base: VAT applies to the selling price including the excise, so part of your VAT pays tax on the excise itself. For a pump price P, the VAT inside it is P × 12 ÷ 112:
| Pump price ₱60/L gasoline | Per liter | 40-L fill |
|---|---|---|
| Excise (TRAIN) | ₱10.00 | ₱400.00 |
| VAT (12% of the excise-inclusive price) | ₱6.43 | ₱257.14 |
| Pure fuel cost | ₱43.57 | ₱1,742.86 |
| Government slice (27.4%) | ₱16.43 | ₱657.14 |
Because the excise is fixed while VAT is a percentage, the government’s share shrinks as prices rise and grows as they fall — but the peso amount per liter from excise never moves. A driver filling 40 liters weekly pays roughly ₱34,000 a year in fuel taxes at those prices.
Suspensions: the escape valve, and 2026 in review
The law builds in relief valves keyed to world oil prices: sustained high Dubai crude averages trigger suspension authority, exercised by the President on the Development Budget Coordination Committee’s recommendation. That mechanism produced Executive Orders in 2022 (brief diesel and gasoline relief when crude spiked) and again in 2026:
- April 17, 2026: a three-month suspension of excise on LPG and kerosene took effect (configured into the Bureau of Customs system), cutting LPG prices by about ₱3.36/kg and kerosene by about ₱5.60/L — those relief figures include the VAT that no longer stacked on the suspended excise.
- Gasoline and diesel were deliberately excluded — the DOF argued the revenue loss (estimated over ₱100B annualized) was too large, and transport groups bore the difference.
- July 8, 2026: the suspension lapsed and rates automatically reverted; kerosene and LPG excise returned to ₱5/L and ₱3/kg, no new law needed.
The lesson for consumers: excise “cuts” in the Philippines are temporary, targeted, and rare — the terminal rates snap back.
Who really pays it
Fuel excise is collected from importers and refineries, but the economics pass it to the pump: jeepney operators, bus lines, fishermen, and households buy diesel, kerosene, and LPG with the tax already embedded. That pass-through is why fuel taxes dominate inflation debates — diesel moves food freight, and LPG moves cooking costs for homes and carinderias alike. There is no pump-side exemption for public utility vehicles; the lower diesel rate is the only structural break.
Run your own numbers
Enter your fuel type, pump price, and fill size — the calculator splits every peso into fuel, excise, and VAT.
Open the Fuel Tax CalculatorFrequently Asked Questions
How much of the fuel price goes to the government?
Roughly a fifth to a quarter of the pump price. At ₱60 per liter of gasoline: ₱10 excise + ₱6.43 VAT = ₱16.43 (about 27%). At ₱50 per liter of diesel: ₱6 excise + ₱5.36 VAT = ₱11.36 (about 23%). The exact share moves with the pump price because VAT is a percentage while excise is fixed.
When did fuel excise rates last change?
The rates last changed on January 1, 2020, when the third and final TRAIN tranche took effect: gasoline ₱10, diesel ₱6, kerosene ₱5 per liter, and LPG ₱3 per kilogram. Since then the only movements have been temporary suspensions — most recently LPG and kerosene excise from April 17 to July 8, 2026 — not permanent rate changes.
What triggers a suspension of fuel excise?
The Tax Code ties suspension to sustained high Dubai crude prices, and the President may act on the Development Budget Coordination Committee’s recommendation. In 2026 this produced a three-month suspension covering only LPG and kerosene; gasoline and diesel were deliberately excluded because of the revenue cost.
Do jeepney and bus operators pay fuel excise?
Yes — diesel carries ₱6 per liter of excise just like private vehicles; there is no exemption for public utility vehicles at the pump. That is why diesel was deliberately given a lower rate than gasoline: the tax is designed to weigh less on transport, agriculture, and freight.
Is the excise on LPG per liter or per kilogram?
Per kilogram: ₱3.00 per kg under TRAIN. A standard 11-kg household tank therefore carries ₱33 of excise, plus 12% VAT computed on the price that includes it — about ₱70 of tax on a typical ₱880 refill.
This guide summarizes the National Internal Revenue Code §148 as amended by the TRAIN Law (RA 10963), Bureau of Customs issuances, and reported 2026 executive actions, as of September 2026. It is not tax advice — consult the BIR or a qualified tax professional for specific cases.