DOE rejects fuel price cap

National

THE government will not impose a price cap on fuel despite rising costs, as this could disrupt supply and discourage oil companies from continuing operations, according to the Department of Energy (DOE).

Energy Secretary Sharon Garin explained that setting prices below global market rates may result in oil firms refusing to import or sell fuel.

“If the government says ₱100 per liter and the price in the international market is ₱110, no one will do business with oil. No one will import, no one will sell, so that will be, I think, the worst situation,” Garin said in a Philstar report.

Instead of enforcing price controls, the DOE is focusing on preventing excessive or abusive pricing practices.

“What we don’t want is abused profit—that’s why we are monitoring and making guidelines for that,” Garin added.

Senator Sherwin Gatchalian earlier pointed out that the Downstream Oil Industry Deregulation Act of 1998 contains provisions allowing government intervention during emergencies, although these are limited to measures such as directing operations of oil companies, reducing tariffs, and investigating violators rather than directly imposing price caps.

Even under Executive Order No. 110, which places the country under a national energy emergency, officials maintain that price controls should only be considered as a last resort.

Meanwhile, analyst Bob Herrera-Lim warned that price caps could backfire by encouraging hoarding and overconsumption.

“Price controls are very dangerous… people will just keep buying as much diesel as they like—stocking up, filling up their tanks every day,” he said, adding that maintaining a stable fuel supply and providing targeted subsidies to affected sectors would be more effective.

To help secure supply, the Philippine National Oil Company has begun importing fuel reserves, with an initial 142,000 barrels already delivered and more shipments expected, bringing total confirmed orders to about one million barrels, although deliveries are being staggered due to limited storage capacity.(Zsarrhied Samantha A. Tanjay,CTU-TC BAEL-ELSD Intern)