DOTr prepares P2.5B fuel subsidy amid rising oil prices

Transportation Secretary Giovanni Lopez said the government has begun preparations for a fuel subsidy program as global oil prices continue to rise, following a directive from President Ferdinand “Bongbong” Marcos Jr.

Speaking in an interview on DZRH, Lopez said the Department of Transportation has started processing the program to ensure funds can be released quickly once the necessary conditions are met.

“tayo ay nautusan ng Pangulo na simulan na namin ang pagpoproseso ng ating fuel subsidy program,” Lopez said.

He added that Undersecretary Mon Reyes was assigned to finalize the program’s procedures.

Lopez said a P2.5-billion allocation has already been set aside under the 2025 national budget for the subsidy, which he described as a continuing appropriation intended to cushion the impact of rising fuel costs.

“Mayroon kaming P2.5 billion from the 2025 budget… Continuing budget po ito at nakalaan sa fuel subsidy sa mga targeted beneficiary natin,” Lopez said.

The subsidy program will cover public utility vehicles, taxis, ride-hailing services and tricycle drivers nationwide, as provided under the 2025 General Appropriations Act.

“…nakalagay doon na kasama [sa fuel subsidy] ang mga PUV, taxis, ride-hailing services at kasama rin po ang mga tricycle driver.”

However, Lopez explained that the release of the subsidy will depend on a trigger condition set by the Department of Energy.

“Kailangang mag-isyu ng certification ang DOE na umabot na tayo sa $80 per barrel,” Lopez said, referring to the global crude price benchmark that must be reached before the subsidy can be implemented.

Under existing rules, the DOE must certify that the average monthly global crude price, based on the Dubai benchmark, has reached $80 per barrel.

Once the certification is issued, the Department of Transportation — working with agencies such as the Land Transportation Franchising and Regulatory Board (LTFRB) and the Department of the Interior and Local Government (DILG) — can begin distributing fuel subsidies to qualified beneficiaries.

Fuel prices in the Philippines have been climbing amid geopolitical tensions in the Middle East, particularly involving major oil-producing countries. Analysts warn that continued escalation could further push global crude prices upward.

Meanwhile, the LTFRB is also reviewing pending petitions for fare adjustments for public utility vehicles.

Lopez clarified that discussions on fare adjustments are ongoing regardless of the current Middle East situation.

Government economists and some lawmakers have also suggested additional measures, including a temporary suspension of excise taxes on petroleum products, should fuel prices rise sharply.

Under the TRAIN law, excise taxes on fuel may automatically be suspended if the average global crude price reaches the same $80-per-barrel threshold used for the subsidy trigger.