The government on Monday convened an emergency meeting with oil companies amid fears of sharp fuel price hikes – of as much as four pesos a liter next week — as tensions in the Middle East roiled global energy markets and threatened supply flows through the Strait of Hormuz.
Meanwhile, Transportation Secretary Giovanni Lopez has directed the road transport sector to complete documentation to allow the immediate release of continuing 2025 fuel subsidies once the threshold of $80 per barrel of crude oil in the world market is breached.
Malacañang noted the Department of Transportation has a P2.5-billion allocation under the national budget for fuel subsidies, already transferred to the Land Transportation Franchising and Regulatory Board for implementation.
Separate allocations are available for other sectors, including P25 million for farmers under the Department of Agriculture and P25 million for fisherfolk through the Bureau of Fisheries and Aquatic Resources, Lopez noted.
Presidential Communications Office Undersecretary Claire Castro said Energy Secretary Sharon Garin met with industry players to assess global oil price movements and their potential impact on domestic pump prices.
“We will discuss further,” Castro said when asked if motorists should brace for a significant increase.
Early indications based on the Mean of Platts Singapore suggest pump prices could rise by as much as P4 per liter next week —on top of increases taking effect today (Tuesday) of P1.90 per liter for gasoline, P1.20 for diesel and P1.50 for kerosene.
“If using today’s early MOPS indication, the difference versus last week’s average would be equivalent to a P4 increase on diesel and a P2 increase on gasoline for next week. This is an indication only,” said Jetti Petroleum president Leo Bellas.
Iran’s announcement that the Strait of Hormuz – the narrow waterway leading to the Persian Gulf, home to most of the Middle East’s big oil producers — had been closed following hostilities involving Iran, Iraq and the United States further pushed up prices.
“We’ve yet to see any clarity on where the latest developments in the Middle East will lead and for how long. Given the current situation, we expect high volatility in oil prices in the near term,” Bellas said.
The Department of Energy’s Oil Industry Management Bureau said oil companies agreed to stagger next week’s anticipated increase if necessary. Director Rino Abad said the DOE could order staggered hikes if adjustments reach P3 per liter, based on previous actions.
Garin, speaking on radio DZMM, cautioned against panic buying and stressed the importance of maintaining supply.
“Prices will go up. I will not sugarcoat it,” she said. “Supply is the most crucial and we do not want it to be affected, and we will run out of oil here.”
Castro said the government is ready to roll out fuel subsidies once global crude prices breach $80 per barrel.
Asked whether President Ferdinand Marcos Jr. would support suspending excise taxes on diesel and kerosene, Castro said the previous tax relief mechanism implemented from 2018 to 2020 had lapsed.
“It appears that this has already expired, and if possible, there should be a new law regarding this,” she said.
Meanwhile, the Philippine Chamber of Commerce and Industry warned that the escalating Middle East conflict could have serious economic repercussions for the country, which sources all its crude oil imports from the region.
PCCI called for an immediate ceasefire and urged the government to secure alternative fuel sources and accelerate renewable energy development.
It also appealed to the Department of Migrant Workers, the Department of Foreign Affairs and the Overseas Workers Welfare Administration to activate emergency protocols for more than two million overseas Filipino workers in the Middle East.
The group warned that higher fuel prices, possible supply chain disruptions and weaker remittances — which hit a record $38.3 billion in 2024 — could stoke inflation and erode purchasing power, particularly for micro, small and medium enterprises.
Senator Bam Aquino reminded the government that the Tax Reform for Acceleration and Inclusion (TRAIN) Law allows the automatic suspension of excise taxes on petroleum products once world oil prices breach $80 per barrel for three consecutive months.
“This suspension will help ease the impact of the expected increase in oil prices due to the conflict in the Middle East,” he said.
Aquino, who filed Senate Bill No. 265 in the 20th Congress seeking to abolish excise taxes on diesel, kerosene, LPG, fuel oil and unleaded gasoline, warned that higher oil prices would trigger a domino effect on food and other goods.
“These taxes have contributed to higher fuel prices, which in turn cascade into increased costs for goods and services, disproportionately affecting low- and middle-income Filipinos,” he said.
In the House, Deputy Minority Leader Leila de Lima filed House Bill No. 8031, or the “Fuel Subsidy Program Act,” proposing a monthly subsidy of not less than P7,000 for public utility vehicle drivers, farmers, fisherfolk and other low-income groups.
“It is important that the government assists sectors that deliver essential services such as transportation and food. By easing their burden, we also help improve the services they provide to Filipinos,” De Lima said.
The measure mandates direct bank deposits to beneficiaries and annual review of the subsidy amount based on inflation, prevailing fuel prices and fiscal capacity.
Global markets reacted sharply to US-Israeli strikes on Iran that reportedly killed Supreme Leader Ayatollah Ali Khamenei and other senior officials.
Brent crude briefly surged nearly 14 percent and West Texas Intermediate almost 12 percent before paring gains to around five percent.
Analysts warned prices could climb further if disruptions in the Strait of Hormuz persist.
“It is likely that prices could be pushed to $100 per barrel and beyond if the current disruption to supply flows in the Strait of Hormuz is prolonged,” Jetti Oil’s Bellas said.
Economists cautioned that sustained high oil prices could fuel inflation, increase shipping and transport costs and weigh on global growth, underscoring the urgency of government contingency measures at home. with AFP
