The Department of Energy (DOE) is asking oil companies to commit to exploring alternative fuel sources as it looks to avoid a “worst-case scenario” if the ongoing conflict in the Middle East continues to escalate.

Energy Secretary Sharon Garin said she is scheduled to meet with oil firms on Wednesday, March 4, to secure their commitment to the agency’s proposed measures aimed at keeping fuel price hikes in the coming days in check.

One of the DOE’s proposals is to encourage companies to study non-traditional fuel sources beyond the Middle East, which accounts for roughly 98 percent of the country’s crude oil imports.

Oil Industry Management Bureau (OIMB) Director Rino Abad said they will ask companies to explore sourcing fuel from the likes of the United States (US) and Canada, as well as countries in South America and Africa.

While this remains a “stop-gap measure” for the government, Abad said securing a continuous fuel supply would essentially act as a ceiling to help keep prices at a reasonable level.

During the initial meeting on Monday, Garin said the DOE was informed by oil firms that they are “more than compliant” when it comes to fuel supply.

Based on DOE estimates, the current fuel supply can last more than two months, well beyond the minimum requirement of around 15 days.

At present, there are also no concerns about any shortage since shipments from source countries take only around a week to arrive in the Philippines.

Garin, however, emphasized that searching for other potential sources is critical, especially if tensions in the Middle East lead to large-scale disruptions in shipments.

“If there will be a full stoppage in the Strait of Hormuz, [where] around 16 to 20 percent of the world supply [passes]. Although it's not majority, it will substantially affect the world price of oil. So if that prolongs, then it will have a major impact on the country,” she explained.

The Strait of Hormuz, a maritime route that connects the Middle East to the rest of the world, is expected to face major disruptions amid the ongoing conflict in the region.

Last weekend, the US and Israel mounted attacks on Iran, which subsequently retaliated with its own wave of strikes across countries in the Middle East, especially those hosting American military installations.

Given the potential impact on the critical chokepoint, oil prices are expected to remain elevated into the coming week. Still, the DOE stopped short of giving an estimate of potential price hikes, noting that it bases projections on five days of trading.

“What I am more definite about is that there will be an increase, unfortunately,” said Garin.

With this, the DOE is also seeking oil companies’ concurrence with the government’s request to implement a staggered pricing scheme next week to ease the impact on consumers.

“So this is just a simple way of adjusting the bulk of the price adjustment. Instead of doing it one time, maybe we can implement it over a series of weekly adjustments or over a number of days,” Abad said.

Abad said the DOE will also ask for the commitment of oil firms to expand their discount programs for motorists, which could go as high as ₱5 per liter.

These efforts are expected to be complemented by President Ferdinand “Bongbong” Marcos Jr.’s push to reduce excise taxes on fuel, potentially through emergency powers granted by Congress.