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The Middle East conflict, particularly the escalation involving Iran, has sent shockwaves through global energy markets. The war has disrupted oil and gas flows through the Strait of Hormuz, a crucial chokepoint for about 20% of seaborne crude oil and liquefied natural gas (LNG) exports, leading to significant volatility in prices and supply chains.
Brent crude oil prices surged by over 60% in March. European natural gas prices also surged, with the Dutch TTF benchmark rising by over 60%. Oil product markets were also hit hard, as diesel and jet fuel benchmarks in Asia more than doubled that month.
(Also read: A New Energy Era: The Philippines’ Bold Turn Toward Nuclear Power)
Coal’s Role in Supporting Energy Price Stability
To cope with the oil crisis, Department of Energy (DOE) Secretary Sharon Garin signaled plans to ramp up output from the country’s coal-fired power plants to help contain electricity costs, noting that rising LNG prices are pushing the Philippines to temporarily rely more on coal as an alternative energy source. This comes as imported LNG prices have surged, with the Japan Korea Marker (JKM) rising by 82%.
She explained that, without government intervention, the country’s electricity prices could increase by as much as 16% this month. She added that the Philippines has secured assurances of a steady coal supply from Indonesia, its primary supplier. The confirmation followed discussions with the Indonesian ambassador.
Garin also outlined a shift in the country’s energy approach, saying, “The basic idea is to ramp down liquefied natural gas and ramp up coal and renewables,” and noting that LNG-fired power plants currently supplying the grid can be quickly substituted with coal-generated electricity in the near term.
“As a net importer of oil, coal, and liquefied natural gas (LNG), we are acting with heightened discipline to preserve power system reliability in the face of escalating global fuel market volatility,” she stressed. “This is a decisive intervention to protect the grid, manage fuel use responsibly, and ensure that essential electricity services remain uninterrupted.”
President Ferdinand Marcos Jr. also said the Philippines would step up coal imports to help secure a stable energy supply. “We are trying to move away from coal, but because of this crisis, we will reopen the importation and buying of coal so that our power plants do not run short of fuel, and to ensure that our power supply remains sufficient, especially across all parts of the Philippines,” he stated.
Additionally, Garin said some market rules may need to be temporarily set aside to provide immediate relief, noting that distribution utilities have indicated readiness to increase coal-fired generation in place of LNG. “We’ll intervene in the market, or whatever is allowed by law, especially for Meralco, which is the biggest distribution utility we have,” she stated.
The Manila Electric Company (Meralco) expressed support for the DOE’s efforts to manage electricity prices, adding that it has sufficient coal supply contracts and is coordinating with power generators to help keep generation charges stable.
Meanwhile, Meralco PowerGen Corporation (MGEN) President and CEO Emmanuel Rubio said there are currently no government restrictions on coal imports for power plants. “With the cost of gas rising faster than coal, we expect coal plants to have higher dispatch schedules, thus the need to ensure that we have sufficient coal inventory,” Rubio added.
According to the Philippine Daily Inquirer, coal continues to play a central role in the Philippines’ energy mix, offering relatively low costs and dependable power generation even as the country expands its renewable energy capacity.
(Also read: Central Luzon Leads As Renewables Power PH Investment Surge Amid Energy Crisis)
Coal Use Surges in Asia
Recent energy market disruptions have led several countries to temporarily increase reliance on coal as a short-term response to high and volatile oil and gas prices, particularly LNG. In Asia, countries such as South Korea, Thailand, Vietnam, India, and Bangladesh have increased coal use or delayed coal plant retirements to stabilize electricity supply.
Industry analysis similarly notes that LNG prices in Asia have reached multi-year highs, making coal the more immediately available and cost-competitive fuel for dispatchable power generation in the short term, despite longer-term decarbonization commitments.
While this shift does not represent a structural reversal of energy transition policies, it underscores coal’s continued role as a system “balancing fuel” during periods of gas market stress, particularly in regions with existing coal infrastructure and supply contracts.
When Stability Takes Priority
As the Philippines navigates a volatile global energy landscape, the role of coal remains difficult to sidestep. While environmental groups have raised concerns about expanded coal use and warned that it could lock the country into a more carbon-intensive path, the immediate challenge is more urgent: ensuring that electricity remains stable and affordable for millions of Filipinos.
In a country where households and businesses are highly sensitive to energy price fluctuations, sustained increases in electricity costs can ripple across the economy. Livelihoods, small enterprises, and essential services are all at risk if power becomes too expensive or unreliable. Without stable and affordable energy, inflation could intensify, industries could slow, and vulnerable communities could be pushed further into economic hardship.
It is somewhat ironic that coal, long targeted for phase-out in the global energy transition, remains an important and highly valued component of power systems during periods of energy stress. In moments of fuel price volatility and supply constraints, coal continues to function as a reliable, dispatchable source of electricity that can stabilize grids when other fuels become expensive or limited in availability.
This underscores the practical reality that, despite strong momentum toward renewables, coal still plays a critical balancing role in ensuring energy security and system resilience in many countries.
Sources:
https://www.iea.org/topics/the-middle-east-and-global-energy-markets
https://www.gmanetwork.com/news/topstories/nation/981291/philippines-us-oil-waivers-emergency/story
https://en.wikipedia.org/wiki/2026_Philippine_energy_crisis
https://www.pna.gov.ph/articles/1270523
https://newsinfo.inquirer.net/2198408/marcos-counting-on-coal-imports-for-stable-power
https://www.gmanetwork.com/news/money/economy/981180/indonesia-ph-coal-supply/story
https://newsinfo.inquirer.net/2204074/ngo-warns-vs-coal-expansion-amid-energy-crisis