Running on fumes

I walked out of the recent House of Representative’s fuel crisis hearing with a number that I could not shake off: 50.42 days. This is how long our oil supply is expected to last. 

On paper, it sounds manageable. In practice, it is a reminder of how little room for error we actually have. At that same hearing, the Department of Energy (DOE) laid out the situation plainly. The government has already procured one million barrels of oil. Discounts for public utility vehicles are being rolled out.

There are even proposals to observe an “Earth Hour” every week. These are steps in the right direction, but they also reveal a deeper truth: we are working within limits that we ourselves have set. Because while global tensions continue to drive prices upward, the Philippines remains unable to act before those increases are felt by consumers at the pump. Under the Oil Deregulation Law, the DOE can monitor and respond, but it cannot preempt. This constraint is being felt more drastically today, as the Philippines now ranks second globally in gasoline price increases at 68.7 percent and fourth in diesel at 128 percent. These are not just figures cited in hearings. They translate directly into higher fares, rising food costs and tighter household budgets. What started as a fuel issue has clearly become an economic one, and the burden is not shared evenly. Our transport sector, the largest energy consumer, sits at the center of this strain. Transportation provides livelihood to hundreds of thousands and mobility to millions, yet many drivers now face a difficult choice. With fuel prices nearing P200 per liter, drivers are forced to choose: continue operating at a loss, or stop altogether.

The ayuda being distributed helps, but it remains a temporary relief rather than a lasting solution. That P5,000 is barely over one day’s worth of gas for the average jeepney driver. We are largely at the mercy of international markets. We import the vast majority of our oil, maintain limited refining capacity that covers only a fraction of demand and lack strategic reserves comparable to our neighbors. We also do not have an oil stabilization fund to cushion sudden price shocks, while various taxes on fuel account for around 20 percent of pump prices. None of these realities are new, but crises have a way of making long-standing vulnerabilities stick out like a sore thumb.

In fact, many of these risks were already evident in the DOE’s 2024 Key Energy Statistics. The data have consistently shown the Philippines’ heavy dependence on imported oil, particularly from the Middle East, as well as the steady growth in energy demand driven by transport and economic activity. 

It also highlighted the country’s limited buffer capacity, both in terms of reserves and domestic refining. A disruption in critical chokepoints such as the Strait of Hormuz was never a remote scenario, but a foreseeable risk embedded in our very energy supply chain. What we are experiencing is less a surprise and more the materialization of vulnerabilities that have long been present, yet ignored, in already-existing data. Looking outward, other countries facing similar pressures have acted with a greater sense of urgency.

Vietnam, for instance, moved to slash fuel-related taxes to zero percent, absorbing an estimated VND 7.2 trillion in monthly government revenue losses to shield consumers from global price spikes. South Korea, despite having over 200 days of reserves, took an even more aggressive approach by capping fuel prices and compensating refiners at a cost of around 5-trillion Won to prevent these increases from being passed on to the public. These are not without trade-offs, but they demonstrate a willingness to use fiscal tools decisively in moments of crisis. 

At home, we have also begun to respond. Just yesterday, the government announced a P10-per-liter fuel subsidy for public utility vehicles, alongside the continued implementation of the service contracting program to support transport operators. These are meaningful interventions that provide immediate relief, but they also highlight that much of our response remains focused on cushioning the impact, rather than addressing the root of the vulnerability.

This brings us to a more difficult, but necessary, question: is it a matter of capacity or of will? Because there are further areas where we can act. We can take a closer look at tax and pricing mechanisms, including the use of replacement cost accounting, to ensure that they remain fair during periods of extreme volatility. We can define clearer thresholds for when government intervention may be warranted as a temporary safeguard during extraordinary times.

For too long, our approach to energy has been largely reactive. We respond when prices rise and adjust when supply tightens, but we have yet to fully transition toward a system that reduces our exposure in the first place. Energy diversification and the creation of strategic petroleum reserves have been part of the conversation for years, yet our dependence on imported oil from geopolitically sensitive regions remains high.

I hope the recent easing of global oil prices signals the beginning of some relief at the pump. A potential upcoming P7 diesel price rollback is far from enough as compared to recent double-digit increases, but we will take any decrease that we can.

I also remain hopeful that the upcoming talks between the United States and Iran will move us closer to stability. But even as we hope for progress, we must recognize that stability in global markets is often temporary and that we must start to look inward. We are not without tools, nor are we without the institutional capacity to act more decisively when needed. The discussions happening now are already a step toward a more honest assessment of where we stand, but clarity must ultimately lead to action. The number we heard in that hearing, 50.42 days, is not just a measure of supply but a measure of time. Time to replenish but, more importantly, time to recalibrate and ensure we move beyond mere fire-fighting and band-aid solutions. Because long after this crisis fades, the real question will remain: will we continue to count the days we have left, or will we finally use them to build a future where we are no longer defined by them?