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MANILA, Philippines — Oil players in the Philippines are “amenable” to staggered fuel price increases, which the Department of Energy (DOE) plans to implement starting next week.
This was one of the topics discussed during Wednesday’s meeting between the DOE and officials from fuel companies –the second time this week that both camps gathered to address the impact of the Middle East conflict on commodities.
“We talked about staggering increases, as well as the discounts, and they appear to be amenable to these efforts,” Energy Secretary Sharon Garin told radio dzMM yesterday. “This is a voluntary thing that they do because oil companies incur losses with these staggered hikes. Traditionally, firms have responded positively.”
The DOE will only know by the weekend how much fuel prices will increase, effective Tuesday, based on five-day trading in global oil markets.
Both the agency and oil players want to avoid speculation to prevent panic.
Three days of trading at the Mean of Platts Singapore indicate that kerosene prices are likely to jump by P28 per liter, diesel by P15 per liter and gasoline by P7 per liter.
Garin warned the public against hoarding fuel products to prevent the depletion of companies’ oil reserves.
“If we do that, the market will be distorted. Our whole system will be destroyed; instead of two months (of reserves), it will be only one month,” the energy chief said.
“Let’s not panic because, based on our assessment of the global situation, supply is not an issue. It’s a matter of price,” she added.
Before the United States and Israel attacked Iran last weekend, the world was dealing with oil oversupply, according to S&P Global, which caused the spot price of Brent Crude to fall by 18 percent in end-2025.
But the conflict has forced Iran to close the Strait of Hormuz, a strategic shipping route through which 20 percent of the world’s oil consumption and global liquefied natural gas supply pass. Almost all the products transiting the strait go to Asian markets.
“If the strait were to close for an extended period of time, it would be among the greatest supply shocks in history, and the price of oil undoubtedly would escalate well over $100 per barrel,” S&P Global said in an analysis this week.
Given the vitality of the strait to the global economy, however, the closure would likely be “temporary.”
The government plans to procure at least one million barrels of diesel to cover an additional five days of supply amid ongoing war in the Middle East, which has led China to suspend refined fuel exports.
Rino Abad, director of the DOE’s Oil Industry Management Bureau, said the plan will be presented to state-run Philippine National Oil Co., which will handle the procurement.
Abad said the planned order would provide an additional buffer to the country, which consumes roughly 200,000 barrels or 33 million liters of diesel daily.
“This could be used to distribute to the private oil sector if there are disruptions in their commercial contracts,” Abad told reporters yesterday, hoping the procurement can be increased to three million barrels given potential supply constraints following China’s pronouncements.
China has asked its largest oil refiners to halt new contracts for gasoline and diesel exports, as ongoing Middle East tensions disrupt crude shipments from one of the world’s top-producing regions.
“That’s a game changer because, diesel-wise, I think we’re importing around 30 percent from China. Hopefully South Korea won’t follow suit, because we import around 40 percent from them,” Abad said.
Jun Neri, lead economist at the Bank of the Philippine Islands, said inflation may still fall within the upper band of the Bangko Sentral ng Pilipinas (BSP)’s target range of two to four percent.
“Last year, oil prices were very manageable,” Neri told One News on Thursday, “and it looks like there’s really a lot of production that’s taken place.”
“If, suddenly, the conflict stops, that could lead to a very sharp decline in oil prices and allow the second-half inflation numbers to stay within the BSP target,” he continued.
“But if it’s a protracted event … then that could have a more enduring effect on inflation, stopping the BSP from cutting rates and maybe considering a very small probability of a hike later this year,” he added.
February inflation print released by the Philippine Statistics Authority this Thursday, which came in at a 13-month high, has not yet reflected the impact of the conflict.
National Statistician Claire Dennis Mapa, however, warned that inflation could further pick up in the coming months, as fuel price hikes spill over into other commodities such as food and water.
Senate, House bills on oil price hikes
Sen. Erwin Tulfo has filed a bill seeking to suspend the 12 percent value added tax and excise tax on fuel if the price reaches $80 a barrel due to the conflict in the Middle East.
“This measure establishes a clear and objective trigger for relief especially with unprecedented external events that can have a trickle down effect on oil prices such as what is going on in the Gulf Region,” Tulfo said. “We have to do a balancing act because this is an emergency. We must ensure the welfare of the ordinary Filipinos is prioritized amid the crisis.”
Senate Bill 1935 seeks to amend Sections 106, 107 and 148 of the Tax Code, so that the VAT on the sale of fuel will be suspended when the average Dubai Crude Oil Price based on the Mean of Platts Singapore reaches $80 a barrel.
A neophyte party-list lawmaker meantime has filed a resolution in the House of Representatives aimed at initiating an inquiry into the possibility of a series of soaring oil prices as a result of the ongoing Middle East conflict between US-Israel and Iran.
“When global oil prices rise, transportation fares, electricity rates, and food prices also go up, and ordinary Filipinos suffer the most. We must act early to protect Filipino consumers from sudden oil price shocks that hurt families and small businesses,” Rep. Nathan Oducado said.
The 1Tahanan party-list congressman authored House Resolution 825 directing the appropriate House committee to conduct an inquiry, in aid of legislation, on the impending oil price increases caused by global geopolitical tensions and market volatility.
In a pastoral statement, Caritas Philippines president and San Carlos, Negros Occidental Bishop Gerardo Alminaza said that aside from pursuing peace through diplomacy, the current situation shows the urgent need to transition to renewable energy.
“We cannot continue investing in a system that fuels both climate destruction and conflict.
Peace is built on justice. And justice today demands an energy conversion,” said Alminaza.
He reminded the people that the country is blessed with abundant renewable energy resources—solar, wind, geothermal and marine energy. – Delon Porcalla, Marc Jayson Cayabyab, Jose Rodel Clapano, Evelyn Macairan
