Philippines to extend PUV fuel subsidy through year-end amid global oil price volatility

Abi Sarabia M., Philippine Canadian Inquirer
August 18, 2026

Photo courtesy: Philippine News Agency

MANILA, Philippines — The Philippine government will keep its fuel subsidy program for public utility vehicle (PUV) drivers running at least until the end of 2026, as pump prices continue to fluctuate amid ongoing tensions in the Middle East, Energy Secretary Sharon Garin said Monday.

Garin said the subsidy would remain in place as long as fuel prices stay volatile and government funding allows. She said the Department of Energy (DOE) would continue the program “while we still have the problem on fuel,” provided the government can sustain the expense.

The announcement comes as motorists brace for another round of price hikes. The DOE said gasoline, diesel and kerosene prices were set to rise by as much as P5.01 per liter, driven by continued instability in global oil markets.

Subsidy increase already in effect

The government raised the per-liter fuel subsidy for PUV drivers to P12 from P10 starting Aug. 15. With the subsidy capped at 150 liters per week, eligible drivers can save up to P1,800 weekly.

According to Oil Industry Management Bureau chief Rino Abad, the government has already disbursed P491.61 million in subsidies to 96,197 unique beneficiaries. Drivers can claim the subsidy at any of 3,312 participating gasoline stations nationwide.

Abad said the program will be reviewed monthly to determine the budget required, based on the number of PUV drivers availing themselves of the discount.

Global tensions driving volatility

Garin attributed the price swings to the broader geopolitical situation in the Middle East, including the Gulf War and Iran’s blockade of the Strait of Hormuz. 

She said diplomatic talks between the United States and Iran had slowed, adding further uncertainty to global crude markets, particularly the Mean of Platts Singapore, the benchmark used to price fuel products in the Philippines.

“Our prices can go up or down in a matter of one week. It really depends on how the negotiations in the Middle East conflict happen,” Garin said.

She added that the underlying conflict shows no signs of resolution. “It seems like the problem is still persisting. The parties are not agreeing on anything and, unfortunately, we are suffering from that,” she said, noting that the DOE remains on “high alert” and is monitoring the situation weekly while coordinating with oil companies.

As a net oil importer, the Philippines depends heavily on crude oil from the Middle East and refined petroleum products from other parts of Asia. Garin said this leaves the country’s fuel supply chain — and by extension, its transport sector and broader economy, exposed to disruptions far beyond its borders.

“That means a conflict thousands of kilometers away can eventually reach the jeepney driver filling his tank, the farmer transporting produce, the business delivering goods and the family managing its weekly budget,” she said.

Garin also cautioned that even if the country’s declared state of national energy emergency lapses next year, fuel prices are unlikely to return to pre-war levels.

Building a strategic reserve

While acknowledging the Philippines cannot quickly reduce its reliance on imported fuel, Garin said the government is taking steps to lessen its exposure to global supply shocks. 

The Marcos administration is moving to establish a strategic petroleum reserve, a government-held emergency fuel stockpile that can be tapped during major supply disruptions.

State-run Philippine National Oil Co. has already begun feasibility studies for the project, with a goal of having at least one storage tank operational by the end of 2027.

“Our objective is that we will hopefully have around 15 tanks, but that will take time because it is a very expensive and long process. But we need to start,” Garin said.

As of Aug. 14, the Philippines’ average fuel inventory stood at 58.34 days, according to the latest DOE data.