Senator calls for oil price cap, rationing

By Adrian H. Halili and Sheldeen Joy Talavera

A Philippine senator on Wednesday urged the government to consider imposing a temporary price cap and fuel rationing as uncertainty over oil supply grows amid the escalating war involving Iran.

Senator Sherwin T. Gatchalian said soaring pump prices should prompt the Department of Energy (DoE) to study the possible imposition of a fuel price ceiling to shield consumers from further shocks.

“While a price cap would provide definite relief to consumers, the price level set should still allow for a reasonable rate of return for oil companies to ensure continuing supply,” he said in a 76‑page preliminary report by the Senate Committee on Proactive Response and Oversight for Timely and Effective Crisis Strategy (PROTECT), which he heads.

The report also called on the DoE to assess the feasibility of placing price ceilings on liquefied petroleum gas (LPG) and kerosene, which are classified as basic necessities under Philippine law.

The recommendations come as the Marcos administration placed the country under a state of national energy emergency through Executive Order No. 110, citing risks to fuel supply and economic stability from global oil disruptions.

Mr. Gatchalian said the DoE should also evaluate whether a subsidy mechanism is needed to cushion the impact of any price cap on oil companies, warning that poorly designed controls could discourage imports and worsen shortages if not paired with support measures.

Beyond price controls, the committee report recommended fuel rationing as a contingency measure to extend existing supply and deter hoarding.

“The DoE may want to consider implementing a fuel rationing plan to extend the country’s existing supply and prevent hoarding,” Mr. Gatchalian said, adding that rationing should be deployed only when supply availability has been carefully assessed.

The DoE earlier said the Philippines has enough fuel inventory to last about 51 days, or until May 27, based on existing stock levels.

A 75.3% reduction in average daily demand for petroleum products would allow existing supplies to last until the end of the year, according to the Senate report.

In a worst‑case scenario where oil shipments stop, an 81.7% reduction in daily demand could stretch supplies until the end of 2026.

“While it may not yet be necessary to impose such severe rationing under present circumstances, the DOE may consider a more modest rationing regime depending on the country’s ability to secure future shipments of petroleum products,” Mr. Gatchalian said.

He also urged the Marcos administration to intensify government‑to‑government negotiations with alternative oil‑producing countries to secure fuel supply.

“The government should flex its diplomatic might and play a more active role in securing the country’s oil supply during this time of crisis,” the senator added.

Domestic fuel prices have surged amid global oil volatility driven by tensions in the Middle East. The Philippines imports about 98% of its oil requirements, underscoring its vulnerability to external supply shocks.

ANTI‑HOARDING MEASURES
Separately, the DOE said it has issued guidelines to strengthen anti‑hoarding measures as rising fuel costs heighten risks of panic-buying and supply manipulation.

In a statement, the agency said the rules cover both commercial hoarding by industry players and consumer hoarding, including excessive fuel purchases beyond normal consumption.

The guidelines set out stricter monitoring, prevention and enforcement mechanisms, including clearer definitions of prohibited acts and indicators of hoarding. Preventive measures include possible temporary purchase limits and tighter regulation of container‑based fuel transactions.

The DoE said show‑cause orders would be issued to parties suspected of violating the rules.

“These guidelines are meant to ensure that petroleum products continue to move where they are needed, when they are needed,” Energy Secretary Sharon S. Garin said, adding that the measures aim to protect consumers and maintain public order amid global oil market disruptions.

In a related move, the Energy Regulatory Commission (ERC) said it has revised rules governing how power distributors recover local taxes, aiming to prevent excessive charges being passed on to consumers.

The revised rules clarify that distribution utilities may only recover taxes that have been actually paid, properly documented and incurred within a defined period. Utilities must submit full supporting documents and regular reports, with all recoveries subject to post‑validation by the ERC.

Any over‑collection must be refunded, while under‑collection may be adjusted in future billings, subject to approval, the regulator said.

“These revised rules ensure that consumers are charged only for taxes that are valid, reasonable and properly verified,” ERC Chairman Francisco Saturnino C. Juan said.