The Department of Energy (DOE) is preparing to spend up to PHP 20 billion to build a fuel buffer stock as part of efforts to secure supply amidst global oil market volatility.

During a press conference this Monday, March 24, Energy Secretary Sharon S. Garin said the government, through the Philippine National Oil Company (PNOC), is targeting the procurement of at least one million barrels of fuel, which is roughly equivalent to about one week of national supply.

Initial purchases covering around 400,000 barrels have already been completed, sourced from Asia, particularly Southeast Asia, with additional volumes being negotiated from outside the region for an additional 600,000 barrels to complete the one-week-supply target.

Garin noted that building even a short-term reserve comes at a high cost, with one million barrels requiring more than PHP 10 billion.

“If you want to have a five-day supply, you need to have about PHP 10 billion,” she said, emphasizing the financial constraints involved in maintaining emergency reserves.

The DOE is also exploring the possibility of expanding the buffer to as much as two million barrels, which could push total costs to around PHP 20 billion depending on external market conditions.

Officials said the buffer stock is intended as a contingency measure to ensure the country does not run out of fuel if global supply conditions worsen. Despite these preparations, the DOE emphasized that current fuel supply remains sufficient, with around 45 days of inventory available based on existing consumption trends.

Garin said the government continues to rely on the private sector for most fuel procurement under the country’s deregulated oil industry, noting that companies face limitations in both financing and storage capacity.

She added that the government is working to diversify supply sources and secure additional deliveries through PNOC, while also maintaining coordination with international partners.

With the government preparing to spend billions on short-term fuel reserves, is this the most sustainable way to ensure the country’s energy security?

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