President Ferdinand R. Marcos Jr. said the Philippine government is prepared to offer fuel subsidies to sectors that could be severely affected by rising oil prices caused by tensions in the Middle East.

In an interview on June 19, Marcos noted that the government is assuming oil prices will increase due to the potential disruption of shipments through the Strait of Hormuz, which is a key global oil route, should the conflict between Israel and Iran escalate further.

“We are starting already with the assumption that oil prices will in fact go up,” he said, citing the strategic importance of the Strait of Hormuz and the likelihood of it being blocked in case of a worsening conflict.

The President said fuel aid will be extended to those most vulnerable to price spikes, similar to previous government efforts. During the pandemic and in 2023, fuel subsidies were provided to public utility vehicle (PUV) drivers to help them cope with surging fuel costs.

With the current geopolitical tensions, concerns have grown over a possible slowdown in the flow of crude oil and liquefied natural gas (LNG) through the Strait of Hormuz. The narrow waterway is one of the most vital chokepoints in the global energy supply chain, handling about ⅓ of the world’s seaborne oil trade and around 20% of global LNG shipments.

Any disruption in this region could have a ripple effect on international fuel prices, affecting not only oil-importing countries like the Philippines but also the global economy.

Officials have yet to announce the timeline or specific scope of the new round of subsidies. However, the Department of Energy and other concerned agencies are expected to monitor the situation closely and adjust support measures accordingly.

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