PH Eyes Fuel Subsidies as Oil Prices Surge

The Philippine government is preparing to roll out fuel subsidies amid rising oil prices driven by escalating tensions in the Middle East, President Ferdinand R. Marcos Jr. said June 19.

“We are starting already with the assumption that oil prices will in fact go up,” Marcos told reporters, citing the possible disruption of shipments through the Strait of Hormuz should the Israel-Iran conflict worsen.

The Strait of Hormuz is a vital chokepoint in the global energy supply chain, carrying about one-third of the world’s seaborne oil and 20% of liquefied natural gas (LNG) shipments. A blockade in the region would likely trigger a spike in global fuel prices.

Marcos emphasized that “the oil cannot come out of its sources” if tensions escalate, which would leave oil-importing countries like the Philippines vulnerable. He said fuel subsidies will be offered to the most affected sectors, especially public utility vehicle drivers.

“So the subsidies that we have always given, fuel subsidies, that we gave to, if you remember during the pandemic, lalong-lalo na ’yung mga napapasada, ’yung mga may hanap-buhay naman sila, binigyan nating fuel subsidies,” the president said.

Assistant Director Rodela Romero of the Department of Energy’s Oil Industry Management Bureau said motorists should brace for a “major oil price shock” as the Israel-Iran conflict threatens critical global shipping passages.

Based on four days of trading data from the Mean of Platts Singapore (MOPS), Romero said the estimated increases for next week are:

• Gasoline: PHP2.50 to PHP3.00 per liter
• Diesel: PHP4.30 to PHP4.80 per liter
• Kerosene: PHP4.25 to PHP4.40 per liter

Fuel companies are expected to announce final price adjustments on Monday, to take effect the following day.

No timeline or exact subsidy amounts were disclosed, but Marcos assured that the Department of Energy and other relevant agencies will monitor the situation closely and adjust aid measures as needed.

Subsidies during previous crises helped shield low-income workers and transport operators from similar price shocks, including those triggered by the COVID-19 pandemic and the 2023 energy crunch.

The Association of Transport Operators said timely support could prevent fare hikes that would burden commuters, while energy analysts warn that sustained tension in the Middle East could cause ripple effects in inflation and monetary policy worldwide.