TRAIN Law Excise Tax in 2026: What Every Driver Actually Pays

Every time you fill up in the Philippines, a fixed government charge is already baked into the price before the oil company, the retailer, or market swings add a single centavo. That charge is the fuel excise tax under Republic Act 10963 — better known as the TRAIN Law. Most drivers know it exists. Very few know exactly how many pesos it adds to their tank, or why the rate no longer moves even when global crude oil does.

Understanding the mechanics is not just academic. It tells you which fuel type to watch, how much of your pump price is locked in regardless of MOPS movements, and where to look when prices shift.

What the TRAIN Law Actually Did to Fuel

The Tax Reform for Acceleration and Inclusion (TRAIN) Act took effect in January 2018 and restructured the excise tax on petroleum products in two important ways.

First, it replaced the old specific tax rates — many of which had been frozen for decades — with a phased schedule of higher, inflation-adjusted rates. Second, it made those rates specific rather than ad valorem. A specific tax is a flat peso amount per liter, full stop. It does not rise or fall with the price of crude oil. Whether Dubai crude is at $60 a barrel or $90 a barrel, the excise component in your fuel bill stays exactly the same.

The phase-in ran across three years: 2018, 2019, and 2020. By January 2020, all rates had reached their final TRAIN-mandated levels. In 2026, those are the rates still in effect.

The Rates That Apply Today

Under the fully phased-in TRAIN schedule, the excise tax rates are:

• Unleaded gasoline (RON 91 and above): ₱ 10.00 per liter
• Diesel (automotive, industrial): ₱ 6.00 per liter
• Kerosene: ₱ 5.00 per liter
• Liquefied petroleum gas (LPG): ₱ 3.00 per kilogram

These figures come from the TRAIN Law's excise tax schedule as administered by the Bureau of Internal Revenue (BIR) and regularly cited in Department of Energy (DOE) fuel price bulletins. They have not changed since the final tranche took effect in 2020.

The excise tax is the one line in your pump price that no oil price movement, peso depreciation, or DOE advisory can reduce.

How the Tax Flows Into Your Pump Price

The journey from refinery gate to your fuel tank involves several cost layers, and excise tax enters at the importer or refiner level — early in the chain, before any other markup.

Step 1: The Base Cost

Oil companies import refined fuel (or refine it locally) at a cost tied to the Mean of Platts Singapore (MOPS), the regional benchmark. This is the most volatile component of your pump price — the one that moves week to week and drives most DOE price adjustment announcements.

Step 2: Excise Tax Applied at the Point of Removal

When fuel is "removed" from a refinery or customs-bonded warehouse — the legal trigger under the National Internal Revenue Code — the oil company becomes liable for the excise tax. For every liter of gasoline removed, ₱ 10.00 goes to the BIR. For every liter of diesel, ₱ 6.00.

This happens before the product reaches any depot, terminal, or petrol station.

Step 3: Value-Added Tax on Top of Excise

Here is the part that quietly amplifies the cost: VAT at 12% is computed on the price inclusive of excise tax. That means the excise base is itself taxed again. Economists call this tax-on-tax cascading. For a practical sense of scale — without inventing a pump price — consider that for every ₱ 10.00 of gasoline excise, the VAT layer adds roughly ₱ 1.20 more to the consumer price, assuming no other changes in the price stack. The exact peso figure shifts with the total pre-VAT price, but the cascading relationship is constant.

Step 4: Oil Company, Dealer, and Freight Margins

After excise and VAT, oil companies add their own margins, freight and storage costs, and dealer commissions. These are the components that vary by brand, by region, and sometimes by service-station format. You can compare current pump prices by brand on TipidGas to see how these downstream margins differ across Petron, Shell, Caltex, and independent stations.

Why Diesel Pays Less Excise Than Gasoline

The ₱ 4.00 per liter gap between gasoline (₱ 10.00) and diesel (₱ 6.00) is deliberate policy. Diesel powers the bulk of the Philippines' freight and public transport network — trucks, buses, jeepneys, fishing boats. A higher diesel excise would translate almost immediately into higher food prices and higher fares for the commuting public, blunting the TRAIN Law's stated goal of directing revenue toward social services and infrastructure.

The trade-off is that private diesel SUV and pickup owners benefit from the same concession as freight truckers. It is a known inefficiency of the structure, debated in Congress periodically but unchanged since 2020.

For ride-hail and taxi drivers running gasoline engines, the full ₱ 10.00 per liter applies. On a 40-liter fill-up, that is ₱ 400.00 in excise tax alone — before VAT, before any oil company margin.

The Suspension Mechanism: When Congress Can Step In

The TRAIN Law includes a provision allowing the President to suspend the fuel excise tax for up to 90 days if the price of Dubai crude oil rises above $80 per barrel for three consecutive months, or if the inflation rate hits a defined threshold. This provision has been invoked in past years as global oil spiked.

In 2026, whether a suspension is in effect depends on current crude prices and the administration's economic assessment — check the DOE's weekly fuel price bulletin for any active suspension notices, or monitor today's fuel price updates on TipidGas, which flag DOE advisories as soon as they are published.

A suspension, when active, removes the excise component from the pump price entirely for the period covered. That is not a small reprieve — on a full tank of gasoline, it can mean ₱ 400.00 or more back in a driver's pocket per fill-up.

What This Means for Your Fueling Strategy

Knowing the excise structure helps you prioritize where to focus your fuel savings.

On fuel type: If you drive a flex or dual-fuel vehicle, the ₱ 4.00 per liter excise gap between gasoline and diesel is a permanent structural advantage for diesel — on top of whatever MOPS-driven price difference exists on any given week. Check current diesel prices and current gasoline prices side by side to see whether the total pump price gap justifies your fuel choice.

On timing: Excise tax is fixed, so it does not respond to weekly MOPS adjustments. What does respond is the MOPS-driven base cost. If oil companies announce a rollback, it applies only to the MOPS layer and any downstream margins — the excise component is untouched. This means rollback weeks reduce your bill, but they reduce it from a base that already includes the full excise.

On brand: Excise tax is identical across all brands and all stations. The differences you see between a Petron pump and an independent station are entirely in the downstream layers — oil company margin and dealer markup. That is precisely the gap worth shopping around for.

On volume: For fleet operators running multiple vehicles, excise tax is a significant fixed cost line. A 10-unit taxi fleet filling up 40 liters of gasoline each per day pays ₱ 4,000 in excise tax daily before any other cost. Compressing fill-up intervals, route-optimizing to reduce consumption, and sourcing from lower-margin independent stations are the levers available — the excise itself is not negotiable.

Tracking What You Can Actually Influence

The excise tax is set by law and collected before fuel reaches any pump. You cannot avoid it, time it, or negotiate it. What you can do is track the components of your pump price that do move — MOPS-linked adjustments, brand margins, and regional price variations — and make smarter fill-up decisions based on real data.

The TipidGas app tracks pump prices from stations across the Philippines, updated regularly by the community and cross-referenced against DOE bulletins. When an oil company announces a rollback or an increase, you can see exactly which stations near you have updated their boards — and which have not. Download it for Android and bookmark the web app to make sure you are always filling up at the most competitive price available on any given day.