Gulf situation still unpredictable; no certainty fuel prices will fall, DoE’s Garin says

THE situation in the Persian Gulf remains unpredictable despite the US ceasefire declaration, with no certainty that fuel prices will stop rising, Energy Secretary Sharon S. Garin told House legislators.

Ms. Garin said at a joint committee meeting on Wednesday that while a two-week ceasefire is in place, it is highly conditional, making it less certain it will be honored.

“Will (fuel prices) go up to (P200 per liter)? Honestly, I don’t know and I don’t think anybody knows yet because like mentioned earlier, there was a pronouncement of a ceasefire, but threats (continue to) go back and forth,” Ms. Garin said.

“Whenever oil infrastructure is destroyed in whatever country, the price spikes… We don’t have any visibility on where this will go. Unfortunately, we are so dependent on what’s happening there,” she said.

She added that even if the war were to stop immediately, it might be several months before Gulf supply resumes its regular flow because of destruction to infrastructure, including liquefied natural gas facilities (LNG) in Qatar — and structural changes in the industry.

Economy Secretary Arsenio M. Balisacan has projected a severe, prolonged-conflict scenario that could elevate inflation to between 5.9% and 6.8% in 2026.

To mitigate these impacts, legislators are pressing for the suspension of fuel excise taxes, which Ms. Garin noted accounts for approximately 20% of the total pump price when combined with value-added tax.

Excise tax adjustments are a pillar of the UPLIFT framework (Unified Package for Livelihoods, Industry, Food and Transport) laid down in Executive Order No. 110, issued to guide the government’s crisis response .

Finance Undersecretary Karlo Fermin S. Adriano confirmed that a recommendation on excise tax relief has been submitted to the President but awaits approval.

“With regard to the suspension or reduction of excise taxes, I cannot discuss it yet because it’s still subject to Presidential approval,” Mr. Adriano said.

As the crisis evolves, energy officials are advocating for a “hybrid” approach to oil deregulation.

Ms. Garin told legislators that while deregulation may work in normal times, “a certain degree of regulation when it is needed, I think it is necessary.”

Proposed amendments to the Oil Deregulation Law would grant the government authority to cap profits or intervene during national emergencies when global oil reaches specific “triggers,” such as an $80 per barrel threshold. — Erika Mae P. Sinaking