Gatchalian: Lockdown during oil crisis may lead to economic downturn, job loss

Imposing a lockdown to conserve petroleum and reduce energy consumption is not the optimal solution for the Philippines amid the ongoing global oil crisis, a lawmaker warned Monday, as it may lead to an economic downturn and job losses. 

As chair of the Senate PROTECT committee, formed to develop contingency plans for the looming oil supply shortage brought about by the United States-Israel war with Iran, Senator Win Gatchalian said the government should instead heed calls for mandatory fuel rationing to impose a “volume cap” on petroleum consumption. 

This would help extend the country’s average fuel inventory from 50 days to 80 or 90 days amid the global supply disruptions and soaring prices, according to Gatchalian.

“I don't advise that we go into lockdown like during the COVID-19 [pandemic] because our entire economy will stop. Many people will lose their jobs,” he said in a briefing. “What we need is to extend the number of days in terms of inventory. We don't have a problem with employment [and] health concerns. Our problem is how we can stretch the number of days in terms of inventory.” 

As of 27 March, the Department of Energy's data indicates that fuel inventory could last an average of 50.94 days. 

The breakdown showed that supplies for gasoline and diesel can last up to 59.78 days and 46.93 days, respectively, up from 53.14 days and 45.82 days, as of 20 March.

The buffer for kerosene also increased to 107.88 days from 97.93 days. This also applied to jet fuel and fuel oil, extending their supplies to 62.69 days and 57.27 days, respectively. 

LPG, the main cooking fuel for households and restaurants, has the shortest supply at just 34 days. 

Some economists have also urged the administration to consider implementing mandatory fuel rationing as early as March to prevent further depletion of supplies. This is primarily because the Philippines is the “most vulnerable” to global oil supply disruptions among its ASEAN neighbors, given that it imports 95 to 98 percent of its oil from the Middle East.

In the meantime, Gatchalian suggested that the Philippines should tap the US and Canada as alternative suppliers, while Senator Erwin Tulfo sought Oman's help to boost the country’s oil reserves.

The Philippines had rationed fuel during the 1973 oil crisis triggered by the Organization of Arab Oil Petroleum-Exporting Countries’ proclamation of an oil embargo against countries supporting Israel in the Yom Kippur War. 

However, despite the challenges some petroleum firms face in scouting for alternative oil suppliers, DOE Secretary Sharon Garin remained dismissive of the proposal. 

Under the DoE Act (RA 7638), the Energy Secretary is empowered to formulate fuel and energy conservation measures in times of critically low oil supply. This is through fuel rationing, load curtailments, and restrictions on the use of government vehicles and resources.

President Marcos Jr. had already placed the country under a state of national energy emergency designed to ensure energy security and stabilize fuel prices amid the ongoing war. Although some lawmakers are pressing the administration to declare a full national emergency to address rising fuel and food prices through a price ceiling mandated under the Price Control Act (RA 7581). 

Bayanihan 3 filed

Among the salient provisions of the proposed Power to the People Act, or the Bayanihan 3 Law, filed by Senator Loren Legarda, is to provide the government calibrated authority to intervene in the energy sector when necessary to prevent supply disruptions and stabilize prices, subject to safeguards and oversight.

This is because the DOE cannot control pump prices because the oil industry is deregulated under the Oil Deregulation Act (RA 8479). This law liberalized the downstream industry and removed government control over the pricing, importation, and export of petroleum products, thereby promoting free competition.

The proposed law also seeks to impose stricter transparency requirements, requiring oil companies to disclose detailed information on pricing, costs, inventory, and supply transactions. 

This allows the government to monitor whether price movements are justified and ensures that any tax relief or policy intervention is fully passed through to consumers. By mandating fair and accurate reporting by private-sector participants, the bill protects the public from profiteering and strengthens accountability across the energy supply chain.

Under the bill, the government may temporarily suspend or reduce excise taxes, and even apply a zero VAT rate on petroleum products, with the clear requirement that these tax breaks be fully and immediately passed on to consumers at the pump. 

It also mandates a thorough clean-up of electricity bills and allows the Energy Regulatory Commission to stagger or defer payments without interest and penalties, while prohibiting disconnection for amounts validly deferred. It explores fair burden-sharing measures, including potential windfall taxes on excess profits and a solidarity-based wealth contribution from ultra-high-net-worth individuals, ensuring that those with greater capacity contribute more equitably to national recovery during the crisis.