PH Government to Buy 2 Million Barrels of Oil as Buffer Stock — 'Precautionary Move' Amid Global Fuel Crisis

The Philippine government is pulling out the big guns to protect the economy from the global oil crisis. Finance Secretary Frederick Go announced Tuesday that the government is moving to purchase up to 2 million barrels of oil to strengthen the country's buffer stock, as Brent crude surpasses $102-$103 per barrel.

The procurement will be handled by PNOC Exploration Corp. (PNOC-EC), which Go says already has multiple offers on the table and is currently selecting which suppliers to go with. The buying is expected to begin this week and will be done in batches through global sourcing — a staggered strategy designed to manage price risks and secure better economies of scale.

"The primary objective is to create additional buffer stock," Go explained. The system will work as a rolling stockpile — inventories get replenished after being distributed to oil companies. Think of it as the government building a fuel safety net for the entire country, just in case things get worse.

As for suspending the fuel excise tax — which many Filipinos have been demanding — Go says it's "too early" for that. He noted that a three-month suspension could cost the government roughly P43.3 billion in lost revenue, and a seven-month suspension could balloon to P105.9 billion. The decision requires a three-step process: legislative authorization, DOE certification of a national urgent situation, and DBCC recommendation to the President.

With oil prices surging over 3 percent on Tuesday — driven by tensions in the Strait of Hormuz and the ongoing Iran conflict — the government is clearly in crisis-response mode. The buffer stock strategy is a stop-gap measure, but for millions of Filipinos feeling the pinch at the pump, the real question remains: when will fuel prices actually come down?

Source: The Manila Times