DOE activates PHP 20-billion fund for fuel security

The Department of Energy (DOE), under the directive of President Ferdinand R. Marcos Jr., is activating a PHP 20-billion emergency fund to strengthen the country’s fuel security amid continued volatility in the global oil market caused by the Middle East conflict.

The DOE, in coordination with the Department of Budget and Management (DBM), will use the funds to implement its Emergency Energy Security Program, which includes the procurement of refined petroleum products, LPG supply augmentation, and domestic inventory stock building. The program targets up to 2 million barrels of fuel to support domestic requirements and mitigate the impact of global supply fluctuations.

The Philippine National Oil Corporation (PNOC) and PNOC Exploration Corporation (PNOC EC) will serve as implementing agencies.

“This is a strong intervention by the President to strengthen the country’s fuel security amid global oil market disruptions,” Energy Secretary Sharon Garin said. “The government is taking concrete and proactive steps to secure fuel supply, maintain orderly market conditions, and protect the welfare of every Filipino motorist.”

The emergency fund is expected to strengthen the government’s ability to respond promptly to supply disruptions, preserve market stability, and support the uninterrupted operation of critical sectors, including transport, food logistics, power generation, and industry.

The DOE said it is coordinating closely with relevant government agencies and industry stakeholders to monitor supply conditions, enforce compliance with existing laws and regulations, and implement all necessary measures to prevent supply constraints, unjustified price increases, and market abuse. The department added that it will publish compliance results of government entities through its official website and other official communication platforms.

In a related move, the DOE has directed power sector stakeholders to immediately implement fuel conservation and prioritization measures following Marcos’ declaration of a state of national energy emergency under Executive Order No. 110.

Signed by Garin on March 25, 2026, the advisory covers generation companies, the National Grid Corporation of the Philippines (NGCP), the Independent Electricity Market Operator of the Philippines (IEMOP), distribution utilities, electric cooperatives, ancillary service providers, and other Wholesale Electricity Spot Market (WESM) trading participants.

Initial simulations by IEMOP estimate that average prices of getting supply from WESM could exceed PHP 9 per kilowatt-hour, up from the pre-conflict average of PHP 5 per kilowatt-hour or less. Power supply from bilateral contracts is also likely to increase as fuel prices escalate.

The DOE called for the adoption of special operating guidelines for system dispatch to support the full utilization, where feasible and subject to system security requirements, of renewable energy resources, indigenous energy sources, and coal. The full dispatch of coal-fired power plants is projected to cushion the increase in WESM prices by up to PHP 2 per kilowatt-hour.

“As a net importer of oil, coal, and liquefied natural gas (LNG), we are acting with heightened discipline to preserve power system reliability in the face of escalating global fuel market volatility,” Garin said. “This is a decisive intervention to protect the grid, manage fuel use responsibly, and ensure that essential electricity services remain uninterrupted.”

Generation companies were directed to closely monitor fuel inventories, comply with their required 15-day fuel inventory, and immediately report any actual or potential fuel supply risks to the DOE for appropriate assessment and possible intervention.

They were also directed to explore feasible fuel alternatives to support cost mitigation and supply adequacy, including options for higher biodiesel blends for oil-based plants and coal blending — mixing different types of coal — or co-firing, which involves mixing coal with locally available feedstock, typically biomass, for coal-fired facilities, subject to technical, operational, and environmental requirements.

For off-grid areas, the DOE called on utilities to use available generation efficiently, continue securing fuel supply, and implement demand-side management measures, recognizing the greater vulnerability of isolated systems to international fuel market disruptions.

The DOE said it will continue to monitor compliance closely, in coordination with the Energy Regulatory Commission, IEMOP, NGCP, and other concerned entities, and will take further action as necessary to preserve system reliability, maintain orderly market conditions, and protect consumers.