How much does the Philippines need to build a strategic petroleum reserve?

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MANILA, Philippines – The current oil crisis has exposed the Philippines’ poor energy security. With fuel supply from the Middle East cut, the country has limited stocks left and no strategic petroleum reserves to tap.

With over 112 million consumers, policy makers will have to decide, moving forward, whether to have a strategic petroleum reserve.

A number of developed countries maintain strategic petroleum reserves for energy security. Japan, for instance, had 208 days of oil stocks as of December 2025, equivalent to around 7 months buffer stock, according to the International Energy Agency (IEA). Of the 208 days of buffer, 123 days were public stocks; 85 days were in stocks of oil industry players. Japan has started releasing its oil stocks to the public, Reuters reported on March 24.

The Philippines has no strategic petroleum reserve and is dependent on what oil industry players have in their stocks. The Philippines’ statutory minimum is 15 days, while the IEA’s recommended threshold is 30 days. The Philippines’ biggest oil company, Petron Corporation, is required to have 30 days inventory while other oil industry players must have 15 days. An inventory below 15 days is the worst-case scenario that the government is seeking to avoid. As of March 27, the Philippines’ average daily supply was at 50 days, five days longer than the 45 days of supply on March 20.

Department of Energy officials told a Senate PROTECT committee hearing on March 24 that the fuel storage tanks of the country’s oil industry players were still basically full for gasoline and diesel, as of March 20.

For diesel, with 46 days of supply, the remaining storage capacity was at eight days; for gasoline, with 53 days of available supply, the remaining storage capacity was at six days; for jet fuel, with 39 days of supply, the remaining storage capacity was at 14 days; for LPG, with 24 days of supply, the remaining storage capacity was 92 days. The most worrying was LPG since this was below the IEA-recommended 30-day buffer stock; the rest were still above 30 days. See graph below:

Petron, which used to be a government-owned and -controlled corporation (GOCC), provides the largest buffer stock for the Philippines. Its CEO Ramon Ang told President Ferdinand Marcos Jr. on March 27 that Petron had enough fuel supply until June 30. Prior to Ang’s event with the President, Petron general manager Lubin Nepomuceno told a Senate hearing that the company had enough supply until end of May.

Among the oil companies in the Philippines, only Petron has an oil refining facility, which is located in Limay, Bataan. Shell Pilipinas closed its Shell refinery in 2020, opting instead to import finished products.

Petron says it can supply 40% of the country’s fuel requirements from its refinery. It imports crude oil which is then processed into gasoline, diesel, LPG, jet fuel, kerosene, and petrochemicals. The refinery’s capacity is 180,000 barrels per day. The Philippines’ average daily demand is around 472,000 barrels per day.

“From the Petron Bataan Refinery, Petron moves its products, mainly by sea, to depots, terminals and airport installations situated throughout the Philippines,” Petron said in its 2024 annual report.

Former Albay congressman Joey Salceda, an economist, said in an article on his Salceda Research that Petron is “effectively the Philippines’ strategic petroleum reserve.”

“We do not have 90 days of emergency reserves sitting in government-owned caverns. What we have is Petron’s refinery inventory, its crude-in-transit, and its storage capacity in Limay, Bataan. In a crisis like this, the crude sitting in Petron’s tanks and the throughput capacity of its refinery are the closest thing this country has to a strategic buffer. That makes the relationship between the government and Petron during this period not just a commercial matter but a national security one,” he said.

Petron has the most extensive distribution network in the Philippines with 30 fuel terminals and 1,800 retail stations as of December 2024.

Petron is particularly critical for the airline industry. “Petron also supplies jet fuel to international and domestic carriers at key airports in the Philippines through its 12 into-plane facilities,” the company said in its 2024 annual report. In addition, Petron is also where the Philippine military buys its fuel.

Petron’s general manager Nepomuceno has recommended to Philippine policy makers that government put up a “strategic stockpile.” He told the Senate that this is a “best practice in other countries to provide buffer stock and stabilize prices during periods of supply disruption.”

How much money for a tank farm?

How much investment is needed for a tank farm and where can it be put up?

For a 90-day or three-month stockpile of 15 million barrels of crude from which Petron can process 5 million barrels per month and produce 25 million liters daily, Nepomuceno said this will require an investment of P54 billion, based on stockpiling at the pre-war level of $60 per barrel.

Nepomuceno identified the PNOC Industrial Park in Mariveles, Bataan, as the potential site to stockpile this amount of fuel. He said that since this is just five kilometers away from its refinery in Limay, Petron can install a pipeline to link it to its refinery.

Watch a short video of this industrial park below:

If the government opts for a stockpile of 180 days or six months, the required investment would be around P108 billion, again based on the pre-war $60 per barrel of crude oil.

Nepomuceno suggested that government provide a soft loan to interested investors for the initial investment of P50 billion to jump-start the strategic crude facility.

If the government decides to store imported (as opposed to processing crude oil) petroleum products (i.e. gasoline, diesel, jet fuel, LPG), Nepmuceno said the required storage of 60 days based on average daily demand (23 million liters for gasoline, 32 million liters for diesel, 6 million liters for jet fuel, and 10 million liters for LPG) would be equivalent to 27 million barrels.

At 1 million barrels per tank, these imports will require 27 tanks to store 27 million barrels.

Nepomuceno said 30 days of imports of finished oil products can be stored in Cavite, and another 30 days in Navotas or in Bulacan.

“And that is the kind of storage required to have a tank farm,” he said. – Rappler.com