The cost of liquefied natural gas (LNG) is shooting up beyond control proving stability is not among the attributes of LNG when it comes to prices.

Fuel accounts for 30 percent to 40 percent of power costs. The 20 percent rise in LNG prices since August 2024 has driven electricity rates up by four to six percent.

Relying on LNG is more than just a choice — it’s a gamble we can’t afford, given the volatile nature of its pricing.

The country imports massive volumes of LNG for use as fuel for power generation.

Stakeholders navigate a tricky field since lower prices have to be anticipated while buying and storing the product.

Hard to anticipate, however, are wars, conflicts, or chaos that impact LNG prices.

Right now, current LNG prices bought from the spot market are between $17 to $18 metric million British thermal unit (MMBTU).

Compare it to Malampaya gas prices which are only about $11 MMBTU.

One of the biggest factors driving LNG prices is the ongoing war in Ukraine started by Russia and had shaken the LNG industry to its core.

Sanctions against Vladimir Putin’s expansionist ambitions have pushed demand for LNG to become erratic.

Major European economies that used to gobble up Russian gas are now saturating the non-Russian supply which smaller economies, like the Philippines,’ are also buying from.The Russian gas curtailment is driving the movement of spot LNG volumes towards Europe and the subsequent increase in price of spot LNG delivered to the East

Escalation ongoing

The price escalation in the LNG trade has been going on for some time.

Senator Pia Cayetano, head of the Senate committee on energy and sponsor of the new law Philippine Natural Gas Industry Development Act, had presented data to debunk claims that LNG prices are lower than indigenous or Malampaya gas.

With the passage of Republic Act 12120, or the Philippine Natural Gas Development Act, we now have a clear legal framework to revitalize indigenous gas exploration — an industry that has been nearly abandoned due to the absence of clear-cut policies.

Fully developing the country’s indigenous gas resources will not only shield the economy from uncertainties of LNG supply but also proves that the country is capable to be self-reliant.

The law is in place. Now, it’s time to buckle down and get to work.