by IBON Foundation
Research group IBON Foundation said that persistently high fuel prices in the Philippines—now among the highest in ASEAN and a major driver of higher March inflation—are the result of deliberate government policy choices that leave the oil industry largely unregulated and profit-driven.
“Fuel prices in the Philippines are high because the government has chosen to surrender price-setting to private oil firms,” executive director Sonny Africa said. “Oil isn’t a simple commodity but an input used widely across the economy, yet the Oil Deregulation Law allows oil companies to price freely according to whatever maximizes their profits. This is made worse by high fuel taxes which just further amplify imported price shocks.”
Philippine diesel prices reached around Php160 per liter as of the first week of April, making them the third highest in the region—surpassed only by Singapore (Php199) and Myanmar (Php166). Gasoline prices stood at Php107 per liter, ranking fourth, behind Singapore (Php159), Myanmar (Php135), and Lao PDR (Php114). IBON noted that countries in the region with stronger state participation and vertically integrated oil industries are better able to stabilize domestic prices and protect consumers. In contrast, the Philippines, along with Singapore, has minimal state intervention, with government response limited to adjusting taxes while leaving pump prices to so-called market forces.
The group pointed out that oil firms’ use of “replacement cost” pricing has enabled substantial windfall profits, estimated at around Php46.5 billion in March alone, or roughly Php1.5 billion daily. These gains come at the expense of the 21.1 million poorest, low-income, and lower middle-class Filipino families already struggling with rising costs of living even before the oil shocks.
“This pricing practice shifts the burden of volatile global oil prices onto ordinary Filipinos while insulating corporate profits,” Africa said. “It is a policy choice, not an inevitability as the Marcos government claims.”
IBON warned that rising fuel costs will further drive inflation, with March inflation already accelerating to 4.1%, and hitting the poorest households even harder. The group called on the Marcos Jr administration to take decisive action, including asserting public control of the oil industry, removing fuel taxes, and establishing stronger state mechanisms to manage oil supply and pricing in the public interest.#
