Despite Strait of Hormuz passage assurance: oil shock relief may lag until June

(PE2 Note: Malaya Business Insight interviews DOE Sec. Sharon Garin and PE2 president Alexander Ablaza on the impact of the Strait of Hormuz passage assurance on the oil supply shock.)

Written/posted by Jed Macapagal, Raymond Africa (Malaya Business Insight), 6 April 2026, 12:35 AM

The government may have secured safe passage for Philippine-bound oil cargoes through the Strait of Hormuz, but officials and lawmakers warned on Sunday the country will remain exposed to elevated global fuel costs, with stable supply and any relief from a new excise tax law unlikely to be felt before June.

Energy Secretary Sharon Garin said over the weekend the recent assurance from Iran that ships bound for the Philippines would be allowed safe passage through the strategic waterway would help ensure steady domestic supply, even if it would not immediately bring down local pump prices.

Iran’s assurance was conveyed after a meeting between Philippine and Iranian representatives last week.

“This is not a perfect solution, and it does not eliminate all risks. But it is an important step that improves our position in a highly uncertain global environment,” Garin said.

She noted that even if much of the country’s fuel is sourced from regional hubs such as Singapore or South Korea, the crude feeding their refineries often still passes through Hormuz.

“Any disruption there creates a domino effect that impacts global supply — and ultimately, prices at the pump. What we have secured is safe and preferential access,” she said.

The Department of Energy (DOE) said the immediate benefits include a lower risk of supply disruption, stronger protection for Philippine-linked cargoes, and improved safety conditions for Filipino seafarers.

“This is risk management, because in a time of global tension, risk reduction is already a meaningful gain,” Garin said.

Crisis-driven import costs

Still, Philippine Energy Efficiency Alliance President Alexander Ablaza said the assured passage would not spare the country from crisis-driven import costs, particularly as summer demand raises pressure on the power grid.

“We are still faced with the fact that the country continues to import oil and other petroleum products at crisis-driven prices,” Ablaza said, noting that cooling demand typically adds at least 3.3 gigawatts to the grid during the summer months.

He said the government had moved quickly to enforce energy efficiency and conservation measures through the DOE and the Inter-Agency Energy Efficiency and Conservation Committee, while several business groups had also committed to conservation steps.

Tell fees on ships

Michael Ricafort, chief economist at RCBC, said Iran’s diplomatic ties with the Philippines have helped preserve fuel access, but warned that Tehran could still impose toll fees on ships passing through Hormuz, adding to the cost of oil and petroleum imports.

He said local supply may remain protected, but prices are likely to stay elevated, especially with renewed threats by US President Donald Trump to strike Iran within the next two to three weeks if no agreement is reached.

Ricafort said that risk could further drive up oil prices and add pressure on inflation, interest rates, and economic growth.

No immediate relief

Senate President Pro Tempore Panfilo Lacson, meanwhile, said relief from Republic Act 12316–which authorizes the president of the country to suspend or reduce excise taxes once petroleum prices breach $80 per barrel and stay there for at least 30 days—may not be felt until June despite the law having been signed last month by President Ferdinand Marcos Jr.

In an interview with radio dzBB, Lacson said the law would take effect on April 12, after which a one-month monitoring period would begin before the Development Budget and Coordinating Council could recommend action to the President.

“Remember, we cannot immediately feel relief from lower petroleum prices even if excise taxes on fuel products are suspended because it will still be cascaded down to the oil companies, to the gasoline stations, the dealers,” Lacson said.

“So, we may not experience it by May. It can be probably felt in June.”

He said he had pushed during plenary deliberations to shorten the monitoring period to two weeks, but that proposal was not adopted.

Erring gasoline stations

Lacson also pressed the DOE to give an update on action taken against more than 70 gasoline stations earlier flagged for prematurely raising pump prices.

“There should be fines or even imprisonment,” he said, adding that cases should be filed to deter profiteering during the energy emergency.

He added that the government now has legal tools to step in if abuses persist, citing laws that allow the President to temporarily take over the operations of oil companies, natural gas entities, and transmission systems during national energy emergencies.

P230B potential aid for hardest-hit sectors

Lacson also said the government should properly use about P230 billion in potential funds — P31 billion from last year’s budget and nearly P200 billion in unobligated and unreleased appropriations this year — to support the sectors most affected by rising energy costs, especially transport workers and lower- and middle-income commuters.

He said any ayuda program must be tightly targeted so that the funds go to those who truly need them, not to politicians or their relatives.

Separately, Sen. Sherwin Gatchalian, vice chair of the Senate committee on energy, said the government should prepare a supplemental budget if the Middle East conflict drags on.

He warned that sustaining social amelioration measures could require between P60 billion and P400 billion in a worst-case scenario.

A preliminary report submitted to Malacañang, he said, recommended P1,500 monthly aid for 5 million minimum wage earners and workers in micro, small, and medium enterprises, as well as cash top-ups for 3.5 million Pantawid Pamilyang Pilipino Program beneficiaries.

It also proposed broader support for near-poor and newly vulnerable households, alongside a scaled-up Walang Gutom Program, as the government braces for the wider fallout from persistently high global oil prices.

Source:

Malaya Business Insight
https://malaya.com.ph/business/business-news/despite-strait-of-hormuz-passage-assurance-oil-shock-relief-may-lag-until-june/

Authored by:
Jed Macapagal and Raymond Africa