A new legislative proposal has been filed in the Senate to establish a permanent fuel-security framework aimed at strengthening market oversight and enabling targeted interventions during emergency price spikes.
Senator Loren Legarda introduced Senate Bill 2435, known as the Philippine Fuel Security and Strategic Petroleum Reserve Act, to enforce strict year-round monitoring while authorizing swift government action when fuel costs reach alarming levels.
The measure stems from vulnerabilities uncovered during recent fuel shocks and Senate PROTECT Committee hearings, which exposed serious gaps in tracking real fuel inventories, actual import expenses, corporate margins, and price adjustments.
“During the hearings, we saw how quickly prices could rise, while the public had limited information on the actual cost of fuel already in the country, existing inventories, industry margins, and the basis for each adjustment. Families felt the increase immediately, but many basic questions could not be answered with the same speed,” Legarda said.
During those inquiries, fuel distributors acknowledged calculating retail prices using replacement costs—the expected price of future imports—even when dispensing existing stock purchased at lower rates. Legarda pointed out that authorities lacked ready access to verification documents.
Under the proposed law, the Department of Energy (DOE) would track oil supplies, stock levels, acquisition costs, landed expenses, and distribution networks continuously. To verify operations, the DOE could demand invoices, shipping manifests, insurance records, and logistics contracts.
This routine monitoring would not constitute standard price controls, and sensitive commercial data would remain protected.
In a declared fuel crisis, however, the DOE would gain power to enforce temporary price limits, mandate priority fuel access for vital services, set emergency inventory levels, and halt replacement-cost pricing if it leads to artificial price hikes or market abuse. Alternate emergency formulas would instead evaluate real acquisition costs, average storage expenses, and reasonable margins.
To address windfall government revenues from value-added taxes during oil surges, the bill mandates a Fuel Tax Transparency Report. Excess revenues would trigger relief measures proposed by finance officials, such as temporary tax cuts or direct subsidies for transport workers, farmers, and fisherfolk.
Additionally, the bill creates a Strategic Petroleum Reserve alongside a Government Operational Fuel Reserve, managed by the DOE with the Philippine National Oil Company serving as the primary security agent.