DoE pushes shift to EV amid oil crisis

The Department of Energy (DoE) on Monday urged government agencies to begin transitioning to electric vehicles (e-vehicles) as the ongoing oil crisis, stemming from the conflict in the Middle East, highlighted the ramifications of the Philippines’ heavy reliance on fuel imports.

Energy Secretary Sharon Garin made the call during the third hearing of the Senate PROTECT Committee, saying the country’s heavy reliance on imported fuel is compounded by the government’s limited ability to respond swiftly to supply disruptions and price surges due to the deregulated nature of the oil industry.

“We are pushing all government agencies that procurement should be for electric vehicles, Mr. Chair. Combustibles make us dependent on diesel; we have realized that. I think electric vehicles will wean us out of dependence on diesel, especially [in] transportation,” she told the panel.

Unlike the Philippines, China is “less affected” by the current global oil supply disruption because its government fleet is already electric.

The Philippines has been greatly affected by the United States-Israel war on Iran, as it imports 95 to 98 percent of its oil from the Middle East.

“With electricity, we can use coal and even renewable energy, Mr. Chair. We’re not only dependent on diesel,” the DoE chief added.

Panel chair Win Gatchalian backed the push for a transition to electric vehicles, calling it the only viable solution to reduce the Philippines’ dependence on fuel imports.

In a year, the government procures “almost half a million new vehicles” with internal combustion engines, according to the chair.

“If we replace this with electric vehicles, we will no longer need to import oil from anywhere,” Gatchalian, who also co-heads the Senate energy committee, averred.

Recently, Gatchalian called on the administration to fast-track the transition of traditional jeepneys to EVs through the PUV modernization program to safeguard drivers and operators from abrupt oil price shocks.

He said EVs are essentially insulated from oil price volatilities and enjoy an excise tax exemption, significantly lowering purchase costs compared with internal combustion vehicles.

Gov’t lack of regulatory powers ‘main problem’

Garin, meanwhile, acknowledged that the “main problem” the government faces in addressing the crisis is its limited authority to regulate the oil industry, including the ability to impose price caps during periods of soaring prices, due to the Oil Deregulation Act (Republic Act 8479), which she said may need to be revisited.

“We are dependent on an industry that the government doesn’t have any regulatory powers over,” Garin told The law liberalized the downstream oil industry, removing government control over the pricing, importation, and exportation of petroleum products to promote free competition among private firms.

Before its enactment in 1998, fuel prices were set by the Energy Regulatory Board based on global oil prices and exchange rates, with the Oil Price Stabilization Fund absorbing fluctuations to prevent sudden changes in pump prices.

Garin lamented that under the current setup, government intervention is largely limited to ensuring that fuel prices are fairly set by private oil companies, but only to a certain extent, even during periods of volatility.

In times of crisis or supply disruption — such as the current tensions in the Middle East — she said the government should be granted greater authority to regulate the industry, though “not to the extent that oil companies cannot purchase oil or operate properly.”

“So I think there should be a revisiting of the Oil Deregulation Law — whether in times of crisis, what pricing do we want, and what is the role of government in the whole oil industry,” she said.

According to the Department of Energy, the oil crisis has driven liquefied natural gas prices up by as much as threefold, while coal prices have increased by about 30 percent.