Atty. Jay Layug, executive board member of the Philippine Energy Research and Policy Institute, said the Philippine government should consider tapping the ASEAN Petroleum Security Agreement to help secure oil supply from regional producers such as Brunei and Indonesia amid tightening market conditions.

Layug said establishing a Strategic Petroleum Reserve (SPR) managed by the Philippine National Oil Company (PNOC) would require significant government study, particularly on budget requirements and storage infrastructure. He stressed that implementation would likely depend on government-to-government arrangements with oil-producing countries to ensure allocation of supply.

The ASEAN Petroleum Security Agreement, signed in 1986, is a regional ASEAN framework aimed at strengthening petroleum supply security among member states. It provides a cooperative mechanism for information sharing and potential government-to-government arrangements to help address supply disruptions, though its operational use in actual emergency coordination has remained limited in practice.

Layug said the agreement enables member states to source oil through government-to-government arrangements within the ASEAN bloc during periods of supply stress.

“This is really a government-to-government discussion,” he told Power Philippines

Layug also said contingency planning should clearly define thresholds for intervention, including structured fuel rationing scenarios depending on the severity of supply disruption.

Layug said rationing could be triggered when there is imminent or actual shortage, depending on available supply levels, adding that government preparedness should include tiered response mechanisms if supply drops by around 15%, 30%, or 50%.

He added that the government should invest in expanded oil storage infrastructure, which could be managed by the PNOC, to build a buffer against supply disruptions.

On policy tools during crises, Layug said any emergency powers should primarily focus on enabling the government to secure supply through contracts and arrangements with other governments or oil suppliers, rather than intervening in market pricing.

He noted that while the Oil Deregulation Law allows the government to temporarily take over oil operations during a national emergency when public interest requires it, he said current circumstances do not justify such intervention as it could further complicate fuel sourcing.

Layug said current supply pressures should also prompt a faster transition to renewable energy, noting that global disruptions affect not only oil but also gas, LNG, and coal prices.

“The current problem should lead to a more aggressive transition to renewable energy,” he said, adding that reducing dependence on imported fossil fuels remains key to long-term energy security.

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