Petron Corp., the Philippines’ largest oil company, sounded the alarm on the risks posed by severe fuel supply disruptions, warning of “catastrophic consequences” for the economy and national security as geopolitical tensions in the Middle East continue roil global oil markets.
Speaking at a Senate hearing on Thursday, Petron general manager Lubin Nepomuceno urged the government to prioritize supply security over price concerns amid tightening global inventories.
“The country should prioritize procuring sufficient supply of fuels. While it is important to look at prices, it is more critical that we maintain sufficient inventory to run our industries and supply motorists’ requirements,” Nepomuceno said.
He cautioned that supply disruptions could hit not only economic activity but also defense operations, noting that Petron supplies fuel to the military and allied forces.
“Supply disruption is more expensive and will have catastrophic consequence to the economy. To this end, the government may need to intervene to facilitate supply arrangement with other countries,” Nepumuceno said.
The warning comes as the closure of the Strait of Hormuz—a key artery for oil shipments—has made it harder for import-dependent countries like the Philippines and Malaysia to secure cargoes. Nepomuceno, who also heads Petron’s Malaysian unit, said competition for alternative supplies has intensified, driving prices sharply higher.
To mitigate risks, he suggested the government explore diplomatic channels to secure supply deals, including seeking waivers to import Russian crude such as ESPO or Eastern Siberia-Pacific Ocean, a feedstock suitable for Petron’s Bataan refinery.
In the same hearing, Shell Pilipinas Corp. president Lorelie Quiambao Osial called on authorities to ensure contracted oil shipments are honored and not diverted to other markets. She also backed efforts to align Philippine fuel standards with those of countries like Australia and Malaysia to widen sourcing options.
With Dubai crude—the country’s benchmark—hovering near USD150 per barrel, Nepomuceno proposed capping excise taxes at a USD50 baseline to cushion consumers from further price spikes.
On Wednesday, President Ferdinand Marcos Jr. signed a law that allows him to suspend or reduce the imposition of excise tax on crude oil and petroleum products. The law takes effect around mid-April.
Lubin also reiterated support for building a strategic petroleum reserve, estimating a three-month buffer could cost at least P54 billion, based on a USD60 a barrel. Such reserves, potentially stored at facilities of Philippine National Oil Co. in Bataan, would provide a critical safeguard against prolonged disruptions.
In an increasingly volatile energy landscape, ensuring supply may prove more urgent—and more complex—than managing prices.
