Philippines to take delivery of 1.04M barrels of diesel to boost fuel supply

By Chloe Mari A. Hufana, Reporter

A GOVERNMENT‑BACKED shipment of 1.04 million barrels of diesel is set to arrive this week, bolstering the Philippines’ fuel buffers as global supply risks rise, the Presidential Palace said on Sunday.

In a statement, Executive Secretary Ralph G. Recto said the purchase is part of state efforts to stabilize fuel supply amid oil market volatility linked to the war in the Middle East.

The delivery adds to recent measures aimed at diversifying energy sources, including commitments from Indonesia to support coal supply and recent inflows of Russian crude oil.

President Ferdinand R. Marcos, Jr. has said the Philippines has sufficient fuel supply for 45 days and is procuring an additional one million barrels to strengthen buffer stocks.

Mr. Recto also pointed to expected output from new wells in the Malampaya gas field later this year, which he said would further support the country’s energy supply outlook.

The government is pairing supply measures with support for vulnerable sectors. Fuel subsidies are being expanded to cover about 250,000 public transport drivers, while additional assistance is being prepared for farmers and fishermen to limit inflation spillovers.

Authorities have also intensified fuel conservation efforts following the declaration of a national energy emergency. More than 1,000 government offices have been inspected, and restrictions have been imposed on nonessential fuel use, as the government deploys both supply‑ and demand‑side responses to rising energy costs.

REVISITING DEREGULATION
Meanwhile, an energy policy analyst said the Philippines needs a more durable energy security strategy that reduces exposure to oil price shocks and restores the government’s ability to manage fuel supply risks, as policymakers weigh possible changes to the Oil Deregulation Law amid surging prices.

Noel M. Baga, co‑convenor of the Center for Energy Research and Policy, said recurring spikes in pump prices reflect longstanding structural weaknesses rather than short‑term disruptions, leaving the economy highly vulnerable to swings in global oil markets.

“The Oil Deregulation Law is a symptom of a broader structural problem,” Mr. Baga said via Facebook Messenger. “We are entirely exposed to global price and supply shocks because we have surrendered every buffer in the name of deregulation.”

Mr. Marcos last week said amendments to the Downstream Oil Industry Deregulation Act of 1998, remain under consideration as war in the Middle East fuels higher oil prices and weaken the peso.

He cautioned, however, that revising the law would take time, even as households and businesses face immediate pressure from higher transport and energy costs.

“Nothing is being discounted, meaning we are discussing everything that can be done so that we can do something to help alleviate the impact of the war in the Middle East,” Mr. Marcos told reporters on March 27. “But what we are focused on now is immediate… amending the Oil Deregulation Law will be a long discussion. I don’t know when it will happen.”

The Philippines relies almost entirely on imported oil to power its economy, making it vulnerable to external supply disruptions and price swings intensified by the conflict involving Iran, which has pushed energy costs higher globally.

Mr. Baga said revisiting deregulation is unlikely to bring near‑term relief from rising fuel prices, but argued it remains necessary to address institutional gaps that leave the country exposed.

He pointed to the absence of a strategic petroleum reserve, limited domestic refining capacity and a diminished role for the Philippine National Oil Co. as key weaknesses.

He said a more active state role in fuel procurement and distribution could help cushion the economy during periods of geopolitical stress and severe market volatility.

Instead of focusing solely on legislative amendments, Mr. Baga said the government already has tools to moderate price increases using existing laws.

“The President already has the tools he needs: classify oil as a prime commodity and impose price ceilings under Sections 4 and 7 of the Price Act as amended by Republic Act No. 10623,” he said. “That requires no new legislation.”

Such measures could provide temporary relief for consumers, Mr. Baga said, though he warned they are not a substitute for deeper reforms needed to strengthen the country’s energy security.

Pressure is also building in Congress to reconsider deregulation. Senate President Vicente C. Sotto III filed Senate Bill No. 1984 on March 24 seeking to repeal the 28‑year‑old law, which allows oil companies to set pump prices based on market forces and limits direct government intervention.

Mr. Sotto said the surge in global oil prices has reopened debate over whether the state should reclaim authority to influence fuel pricing during periods of extreme volatility.

In the House of Representatives, the Makabayan bloc has likewise called for the repeal of the Oil Deregulation Law, arguing deregulation has left consumers exposed to international price shocks. The group has paired the proposal with calls to tax billionaires, saying the revenue could fund relief programs for rising fuel costs.

The administration has already invoked emergency measures. Mr. Marcos last week declared a one‑year national state of energy emergency as fuel prices surged and concerns grew over supply security.

Issued under Executive Order No. 110, the declaration applies specifically to the energy sector and is intended to give the government greater flexibility to respond to potential supply disruptions and price spikes.

The President formed an inter‑agency body, the Unified Package for Livelihoods, Industry, Food and Transport committee, or UPLIFT, to coordinate measures aimed at stabilizing fuel supply, sustaining economic activity and protecting vulnerable sectors from higher energy costs.