The Philippine Energy Research & Policy Institute (PERPI) is calling on the government to make an official Energy Contingency Plan to prepare the country for sudden global price shocks amidst a volatile energy market, like the one it is experiencing now.

In a press statement, PERPI Executive Board Member Atty. Jose M. Layug Jr. said that such an international framework would improve national preparedness while also helping shield the public from sudden price hikes related to fuel and electricity.

Layug pointed out how countries, like the Philippines, are particularly vulnerable to fluctuations in the global oil market due to its heavy reliance on imported fuels.

“The current volatility in global oil markets highlights the continuing need for the Philippines for energy self-sufficiency and to reduce dependence on imported energy resources, particularly conventional fuel such as oil, coal, and gas,” Layug said.

As a result, global supply disruptions- such as the one caused by the closure of the Strait of Hormuz- has a direct rippling impact on the economy of the country.

Layug says that an Energy Contingency Plan would help guide the government in such scenarios and ensure national coordination across the various affected sectors. 

“The Energy Contingency Plan will outline the basic elements needed to start off national preparedness, awareness and response programs to protect consumers without undermining the gains of market liberalization,” he said.

In the short term, PERPI recommends that the government take on measures such as tax adjustments, fuel conservation programs, and digital tools to cushion the impact of sharp price increases of fuel products.

The institute also recommended establishing automatic social protection triggers to provide assistance to vulnerable sectors such as public transport drivers, farmers, and fisherfolk during similar circumstances.

For the medium term, PERPI proposed the creation of a strategic petroleum reserve managed by the Philippine National Oil Company (PNOC) to improve the country’s ability to respond to supply disruptions.

Layug said the Philippines should aim to maintain a 90-day national oil reserve capacity to buffer against potential supply shocks.

The institute also suggested exploring emergency fuel supply partnerships with neighboring countries such as Brunei and Indonesia.

For the long term, Layug said the government should strengthen incentives to attract more investments in upstream oil and gas exploration and the development of renewable energy resources to reduce dependence on imported fuels.

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