Metro Manila, Philippines – Consumers would remain absorbing the high cost of fuel even beyond the Middle East conflict because of damaged infrastructure from the source, Energy Secretary Sharon Garin said.
Garin shared this assessment at the briefing by the government’s economic team at the House of Representatives on Wednesday, April 8, on the response to the Middle East crisis.
“Twenty percent (of the world’s oil supply) is from the Middle East, 80 percent from the rest of the world. If the war stops today, will the 20 percent be able to deliver? I think it will take some months because most of the infrastructure, especially the LNG (liquefied natural gas) has been destroyed,” Garin said.
“If it ever goes back to ₱100 or below, it will take some time,” she added.
The International Air Transport Association said even jet fuel will remain costly because of the conflict’s impact on refineries, even if the Strait of Hormuz – a critical chokepoint for global crude supply – reopens, according to a Reuters report.
US President Donald Trump announced on Tuesday that he agreed with a two-week ceasefire with Iran, which would temporarily reopen the key waterway.
Garin said high fuel costs may “stay longer than the war itself,” adding that fuel may even hit as high as ₱200 per liter.
“I don’t know and I don’t think anybody knows yet because like mentioned earlier, there was a pronouncement of a ceasefire but there are threats going back and forth. Whenever there’s an oil infrastructure destroyed in any country, the price spikes. Then babagsak na naman [then it will fall again] and then suddenly something else happens,” she said.
Brian Poe, FPJ Bayanihan representative, said he talked to some drivers who said they would quit if fuel surges to ₱200 per liter.
“This is a stern warning to all of us na [that] we need to revisit our deregulation law. Because we cannot wait until that crisis occurs and suddenly wala na tayong [we have no more] riders,” he said.
Interventions
Meanwhile, Garin said amending the oil deregulation law, which removed government control on industry prices, would help address the impact of the crisis.
A number of bills seeking amendments to the law are pending in Congress.
“DOE (Department of Energy) cannot stop this. We can monitor, we can watch it, we can reprimand, but we don’t have the powers to control it before it happens,” Garin said.
Antonio Tinio, ACT Teacher’s representative, noted the need for oil firms to disclose fuel pricing to check against possible market abuse.
“Hindi po ba ngayon pwedeng tungtungan na ito ng DOE para ibahagi sa publiko iyong mga banggit natin na breakdown ng so-called industry take, which ranges from 21 percent for diesel and up to 29 percent for gasoline,” Tinio asked.
[Translation: Can’t the DOE intervene for oil firms to disclose their breakdown of the so-called industry take, which ranges from 21 percent for diesel and up to 29 percent for gasoline]
Garin said the DOE has asked oil companies to submit itemized pricing under the national energy emergency declaration.
