President Ferdinand Marcos Jr. will leave it up to Congress to decide on proposals to repeal or amend the Oil Deregulation Law even as calls grow for greater government intervention amid rising fuel prices, Malacañang said Tuesday.
This as Senate President Vicente Sotto III yesterday filed a bill seeking the complete repeal of the Oil Deregulation Law to restore government oversight and ensure uniformity in oil pricing nationwide.
This early, industry sources warned consumers must brace for another round of oil price hikes next week, with initial estimates pegged at P8 to P8.50 per liter for diesel and P2.50 to P3 per liter for gasoline.
Oil prices surged Tuesday as Iran launched fresh attacks on crude-producing neighbors, while several countries pushed back against US President Donald Trump’s demand to help secure the crucial Strait of Hormuz.
“The next stage of the Iran-US war has seen both sides step up attacks on energy infrastructure,” said Kathleen Brooks, research director at trading group XTB.
Trump has called for allies in Europe and elsewhere to help reopen the Strait of Hormuz saying at the weekend that securing the waterway “should have always been a team effort, and now it will be”.
However, the response has been lukewarm, with German Chancellor Friedrich Merz saying the war started by US-Israeli strikes on Iran was “not a matter for NATO” while Britain, Spain, Poland, Greece and Sweden all distanced themselves from the calls. Australia and Japan also opted not to join.
At the Palace, Presidential Communications Office Undersecretary Claire Castro said lawmakers are in the best position to determine whether changes to the Oil Deregulation Law are needed to address volatility in global oil markets.
“If they can show through their draft measure that such amendments would benefit the country, that would not be opposed by the President,” Castro said.
Republic Act No. 8479 or the Downstream Oil Industry Deregulation Act of 1998 liberalized the country’s oil industry by removing government control over fuel pricing and allowing market forces to dictate pump prices.
Calls to revisit the law have resurfaced as fuel prices surged amid tensions in the Middle East.
At the Senate, Sotto noted that before the oil deregulation law took effect, the Energy Regulatory Board fixed petroleum prices based on global oil costs and the dollar exchange rate.
Senate President Vicente Sotto III on Tuesday filed a bill seeking the complete repeal of Republic
“Since 1998, I did not vote for the passing of the Oil Deregulation Law and in 2022, I pushed for the review of this particular law. The law allowed the local oil industry players to adjust the prices of gasoline, diesel, and kerosene every week,” he said.
“It is high time to give back to the state the authority to manage fuel prices,” Sotto added.
For her part, Energy Secretary Sharon Garin assured the public there is no supply crisis, noting that fuel is available but at a higher cost.
“There is no crisis. It just so happened the DOE cannot control prices, and oil companies cannot control price movements in the international market,” Garin said.
She said the country’s oil buffer remained at more than 30 days as oil firms are in ongoing talks with suppliers.
An industry source, however, said supply is beginning to tighten amid a China export ban, though he assured that deliveries are en route.
“Yes, there are deliveries, but they are delayed. This is a sign of tightening supply,” he said.
As this developed, the PNOC Exploration Corporation will procure 2 million barrels of oil to boost the country’s buffer stock, Finance Secretary Frederick Go said Tuesday.
“The PNOC EC will be procuring 2 million barrels of oil from the global markets as a precautionary measure to add to our oil buffer stock,” Go said during yesterday’s InvestPH conference.
He said the volume is equivalent to about 10 days of additional buffer stock.
“The PNOC EC has already started the procurement process, and we should be able to procure about 2 million barrels of oil anytime now to dispel fears that we will have an oil shortage,” he said.
Power industry players also assured the public they are exploring solutions to maintain service, especially during the dry months when demand is high.
Yari Marilao, LNGPH chief executive officer, said the company is diversifying its liquefied natural gas supply outside of the Middle East and is looking at Russia and the US for cargo deliveries.
“I think the best word for us is concerning…Since the conflict started, we’ve seen a significant rise in prices. And second, we’ve also seen some uncertainty in our supply of fuel,” Marilao said during the forum “Middle East Conflict: From Global Markets to Philippines Energy Impact.”
LNGPH accounts for about 20 percent of Luzon’s baseload requirements and 30 percent of Manila Electric Co.’s supply.
“And so, going into the summer, it’s very, very important that we stay online and do our share in keeping the lights on,” Marilao said.
Marilao said 20 percent of the company’s LNG comes from the Middle East. LNG costs have since doubled amid the crisis in the Middle East. With AFP
