Institute for Climate and Sustainable Cities
PRESS RELEASE

QUEZON CITY, 20 March 2026 — Rising tensions in the Middle East have caused extensive damage and have disrupted operations of Qatar’s Ras Laffan LNG facility, the world’s largest liquefied natural gas (LNG) export hub. For the Philippines, this can potentially result in higher electricity prices and supply issues both in the short and long term, highlighting the country’s heavy reliance on imported fuel.

LNG is traded in a highly interconnected global market where prices respond to geopolitical shocks, supply chain disruptions, seasonal demand swings, and policy shifts in major importing regions. As a relatively new LNG importer, the Philippines does not influence prices and instead follows global market trends, leaving it exposed to external factors beyond its control.

On March 19, Iranian retaliation struck Qatar, which handles roughly 20% of global LNG supply, triggering an immediate 10% surge in the Japan-Korea Marker (JKM), a key LNG spot price benchmark in Asia. Combined with ongoing disruptions to shipping routes through the Strait of Hormuz, prices have now risen by 108% from pre-conflict levels. This loss of Qatari supply means countries will now have to compete for the remaining gas, pushing prices even higher.

This price volatility is not unprecedented. In 2022, the JKM surged to USD 53.95 per MMBtu; a nearly 500% increase from typical levels. For the Philippines, these global price movements directly lead to higher electricity costs.

This also translates into tighter LNG supply globally and long-term price increases, as the attacks wiped out 17% of Qatar’s LNG capacity, and repairs can take up to five years. For a country that depends on imported fuel, this prolonged supply gap will likely mean sustained higher prices and intensified competition for spot cargoes, further straining its energy security for years to come.

However, even before these Iranian attacks, Filipino consumers have already been feeling this vulnerability in their electricity bills. In the Meralco franchise area, generation charges have risen from about PHP 6 per kWh in 2023 to PHP 8 per kWh in 2025, a 33% increase linked to LNG use in power plants. With generation costs accounting for roughly 60% of the total electricity bill, any increase in these costs is quickly reflected in what households and businesses pay each month, showing how reliance on imported fuels like LNG directly affects consumers.

What is particularly concerning is that these increases happened during a period when global LNG prices were relatively low. The Philippines did not import LNG during the 2022 price spike, so consumers were shielded from those high costs. However, when LNG imports began in 2023, local electricity prices started following global market trends. This means Filipino households and businesses are now directly affected, and electricity generated from gas is even more expensive than coal. This shows a broader issue: energy systems that depend on imported fuels remain vulnerable to global price changes.

Unlike domestically sourced Malampaya gas, which previously insulated the country from international volatility, imported LNG ties Philippine electricity prices to global markets, shipping conditions, and geopolitical risks.

In addition, this exposure carries long-term economic implications. LNG infrastructure, including import terminals, regasification facilities, and gas-fired power plants, requires large investments and is designed to operate for decades. Once built, these systems can lock the country into continued dependence on imported fuel, keeping consumers exposed to global price volatility for years and putting long-term energy security at risk.

The Institute for Climate and Sustainable Cities (ICSC) emphasizes that while LNG is often framed as a “bridge fuel” due to its relatively cleaner combustion profile, a true transition fuel should reduce systemic risk and not amplify it.

“If the transition fuel undermines energy security or becomes a long-term economic burden, it risks becoming an expensive destination rather than a bridge,” ICSC underscored. “LNG may have a defined and limited role in that journey, but the long-term objective should be clear: a power system where volatility from global fuel markets no longer dictates the electricity bills of Filipino households and businesses.”

In this context, ICSC stressed that renewable energy is emerging as a more sustainable and better alternative to LNG to ensure energy security in the country. Its costs are more stable and continue to decline over time. Renewable energy projects can also be built more quickly and help reduce the country’s dependence on imported fossil fuels.

For a country managing fiscal constraints and urgent development priorities, exposure to global fuel volatility is a fundamental concern.

Energy planning should focus on sources that are reliable, affordable, and locally available. While LNG is often promoted as a transition fuel, the high costs of infrastructure and price volatility highlight the importance of considering alternatives, such as renewable energy and battery storage. The priority is to scale up indigenous and renewable energy sources that can deliver reliable power and protect Filipino consumers from rising costs driven by geopolitical tensions.

ABOUT
The Institute for Climate and Sustainable Cities is a Philippine-based non-governmental organization that advances climate, energy, and low-carbon solutions to enable fair and climate-resilient development at the national and international levels.

CONTACT
Sanafe Marcelo, ICSC: media@icsc.ngo, +63968 886 3466, +63917 149 5649

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PHOTO BY: alexlucru123, via Envato Elements