In light of the escalating supply crisis resulting from the ongoing war in the Middle East, the Philippines has decided to permit the use of a lower-quality and less efficient type of fuel as a temporary measure aimed at sustaining energy availability in the country. The Philippine Department of Energy stated in a press release on Sunday that this decision targets vehicles manufactured in 2015 and earlier, as well as traditional jeepneys, power generation stations, and the maritime transport sector, which will use fuel that complies with the "Euro2" standard.
This step comes after widespread protests from motorists across the Philippines due to local diesel prices more than doubling as a result of fluctuations in global oil prices caused by the conflict between the United States, Israel, and Iran. The government has undertaken several measures to address these crises, including reducing working hours, providing fuel subsidies, and granting the parliament emergency powers to suspend or reduce fuel taxes.
In this context, Philippine President Ferdinand Marcos stated in a video posted on Sunday that the government is in talks with several Asian countries, including India, China, Japan, South Korea, Thailand, and Brunei, to secure necessary fuel supplies. It is noteworthy that the Philippines is heavily reliant on oil imports from the Middle East to meet the country's needs. As part of this strategy, the Philippines is preparing to resume imports of Russian oil this month for the first time in five years.
These measures also aim to adapt to the conditions in Southeast Asia, where pressures are increasing due to the war. Sri Lanka has announced a 25% increase in fuel prices, reflecting the need for many countries to adapt to the rising geopolitical risks affecting energy flows.
Moreover, officials in Sri Lanka expect this conflict to have a wide impact on the country's efforts to emerge from the economic crisis it faced last year, as foreign reserves shrank and debt collection stalled. Under such circumstances, it is important to note the impact of domestic investments and government support in breaking this deadlock and mitigating the repercussions of the ongoing conflict.
The conflict in the Middle East, which has led to Iran closing the Strait of Hormuz—a vital route for oil transport—reflects the instability surrounding the region, further increasing concerns about energy supply and high prices.
Given the current situation in the Philippines, the use of lower-quality "Euro2" fuel will require immediate measures from companies to ensure this type does not mix with higher-quality types like "Euro4." This signifies a significant shift since Manila became dependent on cleaner fuels in 2016, raising questions about the government's ability to restore normalcy under exceptional conditions.
These issues underscore the importance of fuel availability and its impact on the daily lives of citizens in import-dependent countries, making trade and energy project issues more salient in the region's economic policy.