Insider Spotlight
The Department of Energy said it plans to reconvene with industry stakeholders as oil prices surged sharply in recent days, highlighting the country’s exposure to global energy shocks.
By the numbers
According to DOE Oil Industry Management Bureau Director Atty. Rino E. Abad, the Mean of Platts Singapore price index for gasoline rose from $79.63 per barrel on Feb. 27, 2026 to $90.32 by March 2 — a 13-percent increase in just three days.
The surge coincided with the closure of the Strait of Hormuz, a strategic shipping route that handles roughly 20 percent of fuel shipments from the Middle East, forcing tankers to take longer routes.
Why it matters
More than 1.2 million households across the Philippines’ island communities and off-grid areas depend on diesel-fired power plants for electricity.
These areas are not connected to the national transmission network and rely mainly on facilities operated by the National Power Corp. Small Power Utilities Group.
About 99 percent of the 79 NPC-SPUG plants serving roughly 70 islands run on diesel fuel, leaving them vulnerable to global oil price volatility.
The Philippines also imports 73.3 percent of its diesel supply, further exposing the sector to international disruptions.
What they’re saying
“If oil prices continue to escalate and the geopolitical conflict drags on, this can deplete the fund for Universal Charge for Missionary Electrification (UCME) used to provide subsidies for fuel in off-grid areas faster,” said Matthew Carpio, head of Philippine operations of Climate Smart Ventures, an advisory firm advancing the energy transition in Asia.
“This, in turn, could lead to an increase in UCME Rates being collected from all on-grid electricity consumers. Similar to what happened during the 2022 Ukraine-Russia crisis, a prolonged conflict can also lead to 8- to 16-hour blackouts in some off-grid areas if fuel subsidies and diesel stocks are depleted,” Carpio said.
“As a major oil importer, the Philippines is exposed to price shocks. However, current safeguards and a faster shift to more Renewable Energy (RE) and Energy Storage Systems (ESS) can make our island communities and off-grid areas—and even National Power Corporation (NPC)—more resilient against significant oil price volatility due to geopolitical conflicts. This is a reminder why a fast RE transition is not a negotiation but a necessary hedge, especially for off-grid,” he added.
The big picture
The government has begun reducing diesel dependence through the Accelerated Hybridization Program, which aims to deploy solar-diesel-battery hybrid systems across dozens of off-grid sites.
Officials estimate the program could cut diesel use by at least 20 percent while supporting a long-term goal of transitioning NPC-SPUG areas fully to renewable energy by 2030. — Ramon C. Nocon | Ed: Corrie S. Narisma
