For nearly three decades, the Philippine oil market operated under the philosophy of a “free hand,” where prices fluctuated based on global trends with minimal state interference. However, as of April 21, 2026, that era has officially ended. Following the declaration of a National State of Energy Emergency under Executive Order No. 110, the Department of Energy (DOE) has pivoted from a passive observer to an active architect of domestic pump prices.
Jumbo Price Rollback
The shift is most visible in today’s historic “jumbo” price rollback. While oil companies typically announce adjustments based on their own internal calculations, the DOE has now intervened to dictate the mathematical floor for these reductions. As announced by Energy Secretary Sharon Garin, the government has mandated a minimum rollback of ₱24.94 per liter for diesel, ₱3.41 for gasoline, and ₱2.00 for kerosene. This is not a suggestion but is a prescribed directive backed by the full force of the law.
Dictating the “Adjustment” Not Just the Price
The unique angle of this new policy lies in its focus on adjustment caps. Rather than setting a static “price ceiling”, which historically leads to supply shortages, the DOE is now dictating the range of price movements.
Under EO 110, the DOE calculates the “fair” adjustment based on international trading and the current national inventory. By prescribing a minimum rollback, the government is effectively eliminating the “Rocket and Feather” phenomenon, where prices surge instantly during global crises but drift down slowly when international markets stabilize. Secretary Garin emphasized that while companies are welcome to offer larger rollbacks, implementing anything less than the prescribed amount will trigger immediate legal action.
The Legal Teeth of EO 110
The Department of Energy (DOE) has moved beyond “moral persuasion” and is now enforcing Executive Order 110 with full legal authority. Through its Oil Industry Management Bureau, the government has warned that firms failing to comply will face criminal and administrative prosecution under Section 24 of the Downstream Oil Industry Deregulation Act of 1998.
Director Rino Abad, head of the DOE’s Oil Industry Management Bureau, warned of strict penalties for non-compliance.
“Violators face three months to one year of imprisonment, along with fines ranging from ₱50,000 to ₱300,000. The agency is prepared to issue show-cause orders as early as Tuesday morning against firms that fail to comply,” Abad said.
A New Era of Energy Governance
In a historic pivot, the Philippine government has effectively suspended “pure” deregulation in favor of a State-Prescribed Pricing model.
By leveraging Executive Order 110, the DOE now dictates mandatory minimum rollbacks starting with a massive ₱24.94/L diesel cut to ensure global price drops reach consumers instantly.
Backed by the PNOC’s new role in managing strategic fuel buffers and the threat of imprisonment for non-compliant executives, this “Command and Control” approach marks the end of industry-led pricing and the beginning of aggressive state intervention to protect the national economy.
Photo Credit: Carl Kho
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