Philippines eyes early warning system for fuel shocks

The Philippines is moving to establish a weekly National Fuel Risk Index to monitor supply, prices, and demand, allowing the government to respond to potential fuel shortages and global oil market disruptions before they worsen.

Energy Secretary Sharon S. Garin said Thursday that the index will be part of the Department of Energy’s (DOE) 2026 National Oil and Gas Contingency Plan (NOGCP), which seeks to strengthen the country’s preparedness against fuel emergencies.

“A weekly National Fuel Risk Index will track developments in supply, prices, and demand,” Garin said during the Philippine Energy Investment Forum on Thursday.

“Defined risk thresholds will guide government action, allowing the appropriate measures to be introduced as conditions change,” she added.

The contingency plan establishes a rules-based and data-driven approach to managing fuel emergencies, including disruptions in major shipping routes, tanker shortages and refinery outages.

“The NOGCP provides the country with a more systematic framework for managing fuel emergencies,” Garin said.

At present, the Philippines remains heavily dependent on imported petroleum, with around 90 percent of its crude oil imports coming from the Middle East.

Oil accounts for 47.7 percent of the country’s final energy consumption, while transportation represents roughly 70 percent of domestic oil demand.

“For an import-dependent country like the Philippines, disruptions thousands of kilometers away can quickly be felt at home,” Garin said.

As another safeguard, the DOE is pursuing the establishment of a Philippine Strategic Petroleum Reserve, targeting 60 days and eventually 90 days of fuel supply.

“We envision a phased development toward 60 days and eventually 90 days of supply, creating potential investment opportunities in petroleum storage, logistics, and associated fuel infrastructure,” Garin said.

Alongside the contingency plan, Garin unveiled the Fuel Transition Plan, which seeks to reduce the country’s long-term dependence on petroleum through electrification, renewable energy and alternative fuels.

Under its aggressive scenario, the government aims to cut oil dependence by at least 30 percent by 2030, 50 percent by 2040 and more than half by 2050, using 2022 as the reference year.

The transition includes reducing diesel reliance in industries, agriculture, and island communities, alongside expanding electric vehicle adoption and higher biofuel blends.