Revocation of Diesel Fuel Tax Exemption

Tax and duty-free importation under PD No. 1610 included liquefied petroleum gas, motor gasoline, naphtha, and natural gas liquids.
Executive Orders and Letters of Instruction (LOI) authorized exemptions for various petroleum products: LOI No. 837 (fuel oil), LOI No. 839 (diesel fuel and kerosene).
As supply shortages eased, tax and duty exemptions for premium and regular motor gasoline, naphtha, natural gas liquids, and kerosene were lifted through LOI Nos. 1068 and 1135.
By May 1981, only fuel oil and diesel fuel remained exempt from import taxes and duties.

Fuel oil prices and supply are unstable.
Diesel fuel prices have dropped to levels allowing oil companies to import with sufficient profit even without exemptions.
Continuing tax and duty exemptions for diesel could lead to windfall profits estimated at ₱71 million based on projected 860 million barrels importation.

Recognition that current price fluctuations might be abnormal.
Need to maintain some incentive to ensure adequate diesel supply.
Decision to limit exemptions only to the government-owned Philippine National Oil Company (PNOC) to control windfall profits.
This limitation also helps indirectly recover potential government revenue losses.

Section 1: Withdrawal of the tax and duty exemption on diesel fuel previously granted under LOI No. 839.
Section 2: Philippine National Oil Company authorized to import diesel fuel free from customs duties and import taxes, subject to prior clearance from the Bureau of Energy Utilization, for supply shortage alleviation.
Section 3: The Executive Order takes effect immediately.

The Order is issued under the powers granted by Section 401 of PD No. 1464 and Section 1 of PD No. 1610.
Effectivity is immediate upon issuance on April 6, 1982.