Gov’t Eyes Stockpiling, Tapping Non-OPEC Country to Combat Fuel Price Hikes
In its bid to combat the impact of the price surge in the country, the government is looking at sourcing petroleum products from Russia and other countries that are not members of the Organization of the Petroleum Exporting Countries (OPEC).
Based on its statement, the plan will be to “establish a strategic petroleum reserve (SPR) to cushion the impact of the rising price of oil in the international market.”
Department of Energy Secretary Alfonso Cusi was quoted, “The government is aware of the country’s vulnerabilities to abrupt changes in the international oil situation and impending threats on the same, hence we are formulating various strategies to address those vulnerabilities to cushion the impact for our consumers.”
Apart from that, Cusi revealed the two-pronged strategies.
Cusi ordered the Philippine National Oil Company-Exploration Corporation (PNOC-EC) to prepare for oil trading and retail to provide competition to existing oil industry players and pacify domestic oil prices. Cusi is ex-officio Chairman of the PNOC-EC.
Through Board Resolution No.5-5, S’ 2018, Cusi directed and authorized the PNOC-EC to engage in the retail or selling of petroleum products sourced from Russia and non-OPEC members to independent petroleum dealers and to individual public consumers.
Currently, the DOE only requires oil companies to maintain a Minimum lnventory Requirement (MlR) of in-country stocks equivalent to 30 days of crude and products for refiners, 15 days of products for importers/bulk suppliers, and seven days of liquefied petroleum gas (LPG) stocks for LPG players.
The creation of the SPR is founded on a number of joint international studies, according to the DOE-Oil Industry Management Bureau.
In 2003, the Philippines and Thailand signed a Memorandum of Understanding (MoU) to jointly study, investigate and assess the possibilities of cooperation, including the identification of strategic locations for oil stockpiling and distribution points.
Another study was conducted in 2004 by the US Department of Energy to assist the country in assessing the options and potentials for strategic oil stockpiles as well as give recommendations to enact legislation pertaining to the oil stockpiling program.
Japan’s Ministry of Economy, Trade and Industry assistance also came in 2004 to conduct a feasibility study on the development of a master plan and comprehensive scheme for oil stockpiling.
On top of the two mentioned solutions, the DOE continues to advocate exercising “efficient and smart diskarte” on oil consumers’ use of petroleum products, such as managing vehicle trips and its operations.