Philippine Senate pushes to expand fuel price intervention powers

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Senate expands fuel price powers

Highlights

Senate President Sherwin T. Gatchalian proposes amending Republic Act No. 8479 to grant government authority for emergency intervention in fuel price spikes or supply shocks.
The Department of Energy supports stronger regulatory powers, including action against fuel hoarding and improved access to industry data for setting price movement limits during crises.
Philippines' power rates are P14.75 per kilowatt-hour, second-highest in Southeast Asia, with Visayas and Mindanao rates at P12.42 and P12.61, raising concerns over rising costs and supply adequacy.

Legislative push for emergency fuel controls

As reported by BusinessWorld Online, Senate President Sherwin T. Gatchalian is proposing amendments to Republic Act No. 8479, or the Downstream Oil Industry Deregulation Act, to give the government authority to intervene when external shocks threaten fuel supplies or cause extraordinary price increases.

At a Senate hearing, Mr. Gatchalian says the changes would help stop oil companies from imposing arbitrary increases during emergencies. He argues that the government must retain the power to protect consumers during abnormal crises, while Energy Undersecretary Riolita D. Inocencio says the Department of Energy supports stronger intervention powers when fuel prices become extraordinarily volatile.

Ms. Inocencio also says the agency wants provisions that would allow action when there is evidence of fuel hoarding. She adds that the amendments would improve government access to industry information, helping regulators set permissible ranges for fuel price increases and decreases during emergencies.

Power cost scrutiny and regional supply concerns

Lawmakers are also examining electricity prices, with Mr. Gatchalian saying the Philippines has the second-highest power rates in Southeast Asia at P14.75 per kilowatt-hour, compared with Singapore's P17.09 per kilowatt-hour. He adds that power rates in the Visayas and Mindanao have also risen to P12.42 and P12.61 per kilowatt-hour, respectively, sharpening concerns over regional costs and supply adequacy.

Clarice Ann Bernal, a lawyer representing the Energy Regulatory Commission, says higher electricity costs are partly tied to Manila Electric Co.'s reliance on liquefied natural gas. Senator Erwin T. Tulfo questions why coal-fired electricity has become nearly as expensive as gas-fired power despite differences in fuel costs, and urges the regulator to review whether coal generation price increases are justified.

Ms. Bernal says the country's dependence on imported coal has also pushed up generation costs and commits to submitting a report on the rise in coal-related electricity prices. Ms. Inocencio says the Visayas partly relies on electricity transmitted through interconnections with the Luzon and Mindanao grids, and adds that transmission facilities need upgrades while private-sector power barges are set to help ease supply shortages.

In our earlier article on the conflict-driven surge in oil shipping costs, we explained how rising tanker and insurance rates are becoming a major part of crude pricing and can quickly feed into higher pump prices and broader consumer inflation. We also noted that import-dependent markets such as the Philippines are among the most exposed, as disruptions on key routes can amplify fuel costs even when underlying oil prices are unchanged.

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