The government is moving to limit the impact of rising global oil prices on electricity bills by shifting the energy mix—cutting reliance on expensive diesel and liquefied natural gas (LNG) while increasing generation from coal and renewable energy.

Energy Secretary Sharon S. Garin said Tuesday that the shift is expected to cut the projected rate hike caused by the Middle East conflict by at least P2.

“The increase in electricity rates because of the conflict in the Middle East will be lower. We are targeting to reduce that increase by P2,” Garin said on Tuesday.

Nearly 60 percent of the country’s electricity comes from coal—mostly imported—alongside diesel, natural gas, LNG, and renewable energy. 

Garin said that spikes in oil prices have pushed diesel and LNG generation costs higher.

“As of three weeks ago, the initial week of the conflict in the Middle East, we have simulated, and there was supposed to be a 16 percent increase in the price of electricity, especially in the Meralco area, because LNG is a supplier. We use LNG for some part of the Meralco generation,” she explained.

To shield consumers, the Energy Department is rebalancing power sources by dialing down the expensive fuel and dialing up coal and renewables.

“In simple terms, we’ll reduce generation from the expensive sources and increase the cheaper ones. The expensive ones are diesel and LNG. We’re trying to control that and then raise the share of renewables and coal, you know?” Garin said.

The government has coordinated with the Energy Regulatory Commission, coal-fired power plants, and Indonesia—country's top supplier—to ensure supply stability.

“We met with Indonesia, the Indonesian ambassador, and we got Indonesia to assure us of a steady supply of coal,” she said.

On additional coal imports, Garin said the need will hinge on demand and existing stock, noting domestic coal reserves are limited. 

She stressed there are no current restrictions on imports from Indonesia, and any potential export limits are being closely monitored. 

Contingency plans are in place to maximize local coal use and secure energy supply in case of disruptions.