Garin: P30 billion needed for strategic oil reserve

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June 5, 2026 | 12:00am

MANILA, Philippines — The Philippines will need about P30 billion to build a strategic oil reserve capable of providing an additional 30 days of fuel security in the event of supply disruptions, according to Energy Secretary Sharon Garin.

While plans remain in the early stages pending feasibility studies, Garin said the government is firmly committed to building a strategic buffer on top of the fuel inventories currently maintained by private oil firms.

A strategic petroleum reserve is an emergency stockpile of crude oil and refined petroleum products maintained by the government, private entities, or both.

It is released when normal oil supply is disrupted by events such as geopolitical conflicts, natural disasters, or global shocks, helping stabilize supply and prices while ensuring fuel availability for the country.

“What we want is to add another 30 days at the very minimum. The current 30 days from the private sector, plus 30 days from our strategic reserve. So it will be 60 days, and it can still improve,” Garin said.

Citing early estimates, Garin said a storage facility capable of holding one million barrels of fuel — equivalent to about five days’ worth of supply — could cost around P5 billion.

To finance the project, the Department of Energy (DOE) is exploring support from private investors and Maharlika Investment Corp., which manages the country’s sovereign wealth fund.

The energy chief noted that the Japanese government and private institutions have also expressed strong interest in supporting the initiative, particularly in conducting feasibility studies.

“Hopefully, we don’t get it from the GAA (General Appropriations Act),” she said, referring to the country’s annual budget.

Asked about potential locations for the storage facilities, Garin said the DOE is setting its sights on economic and industrial zones in Mindanao, as well as sites in Bataan and Subic, Zambales.

“There are different areas, and that’s why we need more feasibility studies to determine what would be suitable, because you have to consider the logistics of delivering from the site to the gas stations,” she stressed.

The DOE had previously been lukewarm on establishing a strategic petroleum reserve, citing the absence of oil supply issues.

However, it faced a stark reality when conflict in the Middle East erupted in late February, triggering global supply disruptions.

The Philippines, which sources around 98 percent of its crude oil from the Middle East, quickly felt the impact of tighter supply conditions.

As of May 29, the country’s average fuel inventory stood at 45.97 days, according to DOE data.

Amid restricted maritime traffic through the Strait of Hormuz, which connects the Middle East to the rest of the world, Petron Corp. — the country’s only remaining oil refiner — was even prompted to source crude from Russia.

The government, through the Philippine National Oil Co. – Exploration Corp., also procured diesel from suppliers outside the Middle East to help avert potential supply shortages.

As of May 29, the country’s average fuel inventory stood at 45.97 days, according to DOE data.