Palace insists: No oil crisis, as diesel nears P130/liter

Palace insists: No oil crisis, as diesel nears P130/liter | Daily Tribune

“The Department of Energy and this administration, under the directive of President Ferdinand Marcos Jr., are exerting all efforts to ensure there is no disruption in the supply of oil and petroleum products in our country,” she added.

Castro said the situation is better described as a “price disruption” rather than a supply crisis.

“What we are saying is that we still do not have, and have not declared, an oil crisis because the supply remains sufficient for now. Most likely the issue is really about prices, especially given the ongoing crisis in the Middle East,” she said.

The Palace gave the assurance ahead of another round of major price hikes set for Tuesday, which could push diesel close to — or even beyond — P130 per liter and gasoline past P100 per liter.

The transport sector is among the hardest hit, as operators struggle to cope with surging fuel prices that current fares can no longer offset.

Public utility jeepneys, buses, UV Express vans and delivery riders have seen their daily earnings shrink, with a growing portion of their income going straight to fuel.

Many have been forced to cut trips, consolidate routes, or push for a fare increase — moves that commuters are also finding difficult to absorb, even as President Marcos has so far opposed a fare hike.

Enough supply, for now

The Palace’s position echoes the DoE’s estimate that the country has around 50 days’ worth of fuel supply, including in-country inventory and shipments already in transit.

Garin has repeatedly described the reserves as “sufficient,” noting that oil companies continue to secure supplies and the government is exploring alternative sources outside the Middle East.

Officials have also cautioned against panic buying and hoarding, saying there is no need for rationing as long as consumption remains normal.

Castro also disclosed ongoing negotiations to import 440,000 barrels of oil, with an additional 600,000 barrels available for purchase. Combined, however, this volume would cover only about two days of the country’s total fuel consumption.

Data show the Philippines consumes 480,000 to 490,000 barrels of oil per day based on recent figures, with the bulk of demand in diesel and gasoline, followed by fuel oil and liquefied petroleum gas. The country imports about 98 percent of its fuel requirements, leaving it highly vulnerable to global price swings.

Fuel pricing

Meanwhile, Castro defended current fuel prices.

“Under the deregulated downstream oil industry framework based on Republic Act 8479, oil companies set prices according to prevailing international benchmark prices, primarily the Mean of Platts Singapore, every pricing cycle,” she said.

“Oil companies use FIFO — first in, first out — accounting. This is what they use now, where the products being sold today are priced based on current or near current international market prices, and not on the historical acquisition cost of the inventory,” she explained.

She said this means pump prices reflect current global market conditions even for fuel that was bought earlier at a lower price.

“That is how the system works under the Oil Deregulation Law. Pump prices reflect current global market conditions. The Department of Energy cannot dictate the price of gasoline or fuel because we have this law in place. The government, through the DoE, can only step in if there are violations of benchmarks or instances of abuse,” Castro said.

No downplay

The Palace spokesperson maintained the government is not minimizing the impact of the price surge.

“We are not downplaying anything — this is simply the real situation. The government, under the President’s directive, is working hard to make sure there is no shortage of petroleum products. Everything is being done. The DSWD is providing assistance, the DoE and DA are doing their jobs, along with other agencies. In other words, we do not want our countrymen to feel that there is any lack of supply. Our supplies of crude, oil, fuel, and even food are complete,” Castro said.

She stressed that the Marcos administration has paid proper attention to the affected sectors, including by providing financial aid.

“Even if prices are rising because of the conflict in the Middle East, the President wants people to feel that the government can cope, that the government is here for the public, and that the President and the government will not abandon them in what we are going through,” she said.

At the same time, Castro called on Filipinos to work with the government.

“We cannot deny it; we just cannot ignore the fact that there really is a crisis in the Middle East, and we have become part of it. Even if we don’t want to be, we will really be affected — that’s the reality,” she said.

Emergency powers

Both the House of Representatives and the Senate have passed a bill granting President Marcos emergency powers to respond to the fuel crisis, but he has yet to receive the enrolled copy for his signature, Castro said.

“To the best of our knowledge, it has not yet been transmitted — at least based on my latest information. We are waiting for it to be sent to the President for his signature. Once it is received, the President will sign it immediately, and all actions that can be taken — so long as they do not violate the law and remain within the provisions of the emergency powers being proposed — will be carried out by the President,” Castro said.

Castro also said the Department of Social Welfare and Development, led by Secretary Rex Gatchalian, has confirmed that additional assistance will be provided beyond the initial rollout.

“According to Secretary Gatchalian, upon the directive of President Marcos, additional aid will be provided. It will be prioritized and properly timed,” she said, adding that the DSWD in the coming days will continue to release cash assistance to affected public utility drivers in tranches.