IN NUMBERS: Philippine sources of electricity affected by Middle East crisis

Will there be blackouts because of the Middle East crisis? 

The closure of the Strait of Hormuz has choked global oil supply, while the bombing of the Ras Laffan liquefied natural gas (LNG) facility in Qatar, which is the largest LNG hub in the world, has led to increased competition for remaining sources. 

Despite the grim news, the Department of Energy (DOE) has already debunked speculations of power outages caused by the Middle East crisis — and when you look at the source of our country’s electricity, it makes sense. Most of our power plants are coal-fired, and coal does not pass through the Strait of Hormuz, according to Jonathan Teubner, an energy analyst quoted in the Financial Times. Meanwhile, our oil-based power plants generate only about 1% of our total power as a nation, according to 2024 data from the DOE.

In terms of LNG, the same data shows that the majority of the country’s supply comes from indigenous sources, while most of our imports are sourced from non-Middle-Eastern countries.

Does that mean we have nothing to worry about when it comes to our electricity? That’s not entirely true.

Oil is still the main power source for many remote areas, with nearly 90% of the installed capacity of off-grid plants coming from oil-based power plants, especially diesel. Oil-based electricity also remains a key source for additional power supply during times of peak demand, which is usually during the summer.

Beyond the issue of supply, cost is another problem. Our reliance on imported fossil fuels like coal, oil, and LNG makes us vulnerable to price shocks and changes in foreign exchange rates. 

The cost of these vulnerabilities then ends up falling squarely on the shoulders of regular consumers. The Energy Regulatory Commission (ERC) said market simulations showed a potential increase of P2 to P4 per kWh by April.

Here’s the data you need to know to understand how the Middle East crisis is affecting the country’s electricity.

Oil: Low generation, but crucial when it matters

When looking at the numbers, oil-based power generation seems to make up a negligibly small portion of our electricity system. Only 12.9% of our installed capacity as of December 2025 relies on oil, after all. The actual electricity generated from that capacity is likely to be even smaller, although data for 2025 is not available yet.

For example, actual power generation in 2024 — with 13.6% installed capacity coming from oil-based power plants at the time — came up to only about 1% of the total electricity the Philippines produced that year.

The lower generation compared to installed capacity is because oil-based power plants are usually used in two cases: for off-grid plants usually located in remote areas and as peaking supply. But it is for those two exact reasons that low oil supplies — especially diesel — are concerning.

Many remote areas rely on diesel power plants for power, with 89.3% of installed capacity from off-grid power plants using oil as a fuel source. During a March press briefing, the Institute of Cities and Sustainable Communities (ICSC) said this could result in reduced operating hours for these power plants and higher electricity costs, while overall diesel supply in these areas may also become constrained.

As the summer months roll in, oil-based power plants as a source of the Philippines’ peaking supply also become even more crucial. These plants are usually used as additional power supply when baseload coal plants cannot keep up with higher electricity usage.

The fact that the Philippines already has thin operating margins does not help, especially in the Visayas. The ICSC has already warned that the projected high summer demand and persistent problems in forced outages of baseload coal plants can lead to low operating margins in vulnerable sub-grids.

In short, this means that areas that were already prone to blackouts may become even more vulnerable to them. 

And that’s not to mention that generator sets usually used in the Philippines are usually run by diesel, too, according to a 2025 market study by Astute Analytica, a global market research and advisory firm.

Coal and LNG: Increased competition leads to higher prices

Both coal and LNG make up a sizable portion of the country’s power mix, but our supplies of them that are used for electricity do not pass through the Strait of Hormuz nor do they come from the Middle East. 

According to the DOE’s 2024 data, most of our coal comes from Indonesia, while our LNG either comes from our own Malampaya Gas Field or imported from Australia, Nigeria, or Equatorial New Guinea.

So does that mean these power generation sources are safe? If you think so, then that’s what the rest of the world is probably thinking, too. 

With the expanding and devastating effects of the Middle East crisis, countries all over the world are also scrambling for alternative supply. This drives the global market prices of all remaining fossil fuel supplies up, even if the Philippines does not source the majority of its coal and LNG from the Middle East. 

Because we rely heavily on imports for our energy sources leaves us vulnerable to these kinds of volatilities in the global market.

Higher foreign exchange rates also drive up the cost, especially with the Philippine peso breaching the P60-mark against the US dollar because of the Middle East crisis.

All these increased costs will end up getting passed on to consumers through their electricity bills, according to the ICSC. Initial projections saw a P9 per kilowatt-hour jump in electricity costs, but the ERC suspended the Wholesale Electricity Spot Market (WESM) on March 26 to prevent such a large spike.

But as the war in the Middle East continues to rage on with no clear end in sight, the ICSC said the country’s heavy dependence on imported fossil fuels will continue to keep the Philippines vulnerable to global market shocks that are beyond its control.

There is a way to take back that control though, according to the ICSC.

“Today, the Philippines is in an advantageous position where policy decisions that favor indigenous energy — solar, wind, hydro, and geothermal — can shift the country away from its dependence on volatile global fuel markets,” the ICSC wrote in a recent policy paper. 

“Indigenous energy resources are largely immune to global price swings and provide predictable generation costs, shielding consumers and the economy from abrupt price hikes.” – Rappler.com