By Kenneth Christiane L. Basilio, Reporter
The Philippines is exploring direct talks with foreign governments and inspiring local oil corporations to hunt alternative suppliers because the conflict in Iran enters its second week, Energy Secretary Sharon S. Garin said on Monday, noting that current stockpiles are sufficient to last until April.
“The Philippines continues to be in a superb state,” Ms. Garin told congressmen at a hearing. “We’re hoping for the most effective, but we’re preparing for the worst.”
Local oil corporations have agreed to stagger price increases this week, with hikes starting from P2.50 to P10 per liter, as global oil prices proceed to surge. Overall fuel costs could climb P17 to P24 per liter, she said.
The Philippines is a net importer of oil and relies heavily on Middle East crude, which accounts for roughly 98% of its imports, in keeping with Department of Energy data.
Gasoline prices have risen for eight straight weeks, diesel and kerosene for 10. Last week, oil corporations raised gasoline by P1.90 per liter, diesel by P1.20, and kerosene by P1.50.
The newest price pressures follow escalating US and Israeli strikes on Iranian targets, Tehran’s retaliatory attacks, and a partial closure of the Strait of Hormuz, through which about 20% of the world’s seaborne oil and gas shipments flow.
US President Donald J. Trump has signaled that military motion would proceed “so long as needed” to curb Iran’s nuclear ambitions and pursue regime change.
White House Press Secretary Karoline Leavitt on Saturday said achieving Washington’s objectives could take “4 to 6 weeks.”
Ms. Garin warned that prolonged disruptions would weigh on the Philippine economy. “A price change of two weeks could have an extended effect on our economy because prices will readjust and fares will go up,” she said.
Socioeconomic Planning Undersecretary Rosemarie G. Edillon said sustained hostilities could push inflation higher.
An agency simulation projected inflation at 6.3% to 7.5% in March under an “extreme case,” with similar levels expected in April.
For this scenario, crude oil prices could reach $140 per barrel but may taper off later. Nonetheless, elevated prices could persist until September, she said.
The federal government can be considering policy measures to mitigate the economic impact. Finance Undersecretary Karlo Fermin S. Adriano said suspending or scrapping the excise tax on fuel products could cost the state roughly P136 billion from May to December, depending on timing.
Proposals to temporarily cut fuel levies have gained traction in Congress, drawing on a 2017 law that allowed suspension of excise duties if global crude exceeded $80 per barrel for 3 months, a provision that lapsed six years ago.
Ms. Garin said authorities are monitoring stockpiles and inbound shipments closely, while local corporations are diversifying supply chains.
“The federal government is continually preparing to forestall shortages that might weigh on economic activity,” she added.