GOVERNMENT is considering alternative sources of energy in the event of a “worst-case scenario” for Middle Eastern suppliers, Energy Secretary Sharon S. Garin said.
“Marami tayong pwedeng pagkukunan (There are many sources we can draw from). 20% lang passer sa The Strait of Hormuz (only 20% of the world’s energy passes through the Strait of Hormuz,)” he said, referring to the roads blocking access to the Persian Gulf, which is at risk of being blocked by war in the region.
“There are many countries that produce oil and are willing to sell oil to the Philippines,” said Ms. Garin in a press conference on Tuesday.
Reuters reported on Monday that Iran would fire on any ship trying to pass through the Strait.
Users of the Strait include Saudi Arabia, the United Arab Emirates, Iraq, Kuwait and Iran.
Ms. Garin said that 98% of the Philippines’ dirty goods come from the Middle East. The remaining 2% is found in Brunei and Malaysia.
“Looking globally, significant changes in global conditions may be reflected in broader market prices,” he said.
Rino E. Abad, director of the Department of Energy (DoE)-Oil Industry Management Bureau, said that other suppliers not affected by the disruption in the Persian Gulf include the US, Canada, South America, and Africa.
“‘It is very important to you– put forward ng the door no ‘yung masigurado ‘yung continuous supply ng fat of ‘yes it is big time price increase ay hindi ma-use at once. (The department’s priorities are to ensure a continuous supply of fuel and to ensure that higher prices do not come into effect all at once). The integration of these measures will reduce the impact on consumers,” he said.
Ms. Garin said that oil companies have enough assets to meet the demand for fuel.
“We want to assure Filipino families, motorists and businesses that the country’s fuel is sufficient and stable,” said Ms. Garin.
Oil companies are required to keep at least 30 days’ worth of crude oil and 15 days’ worth of finished petroleum products.
Ms. Garin said ordering takes about a week, noting that maintaining a year’s worth of inventory would be expensive and require additional storage.
“We are ordering all the oil companies to send us this week, tomorrow, if possible, all the emergency measures they are currently taking as a situation like this or if it increases or increases,” said Ms. Garin.
He also ordered the Philippine National Oil Co. to pursue other sources in case the oil companies need help.
Energy Undersecretary Alessandro O. Sales said supply is less of a concern than price.
“There will be petroleum products that cannot be bought. The biggest risk … is how much the price will rise. Therefore, (the DoE is focused on) how to reduce the impact on prices,” he said, adding that a possible suspension of excise duty on petroleum products is on the table.
President Ferdinand R. Marcos, Jr. he said at the Palace forum earlier on Tuesday that he is thinking of seeking congressional authority to temporarily reduce the excise tax on fuel products in the event that oil prices in the world increase significantly.
The Accelerating and Incorporating Tax Reform Act imposes increased excise taxes on gasoline products in three phases between Jan. 1, 2018 and Jan. 1, 2020.
The largest tax increase was applied to diesel, liquefied petroleum gas and bunker, with prices increasing from P2.50 to P6 per liter.
“We are willing to provide assistance in any form that is needed,” said Ms. Garin.
On Monday, oil companies announced that they will increase the price of gasoline by P1.90 per liter, diesel by P1.20 per liter, and kerosene by P1.50 per liter.
The maximum resolution is marked 10th a week in a row of increases for diesel and gasoline, and eight straight weeks for gasoline. Since January, the prices per liter of gasoline, diesel, and kerosene have increased by P6.70, P9.40, and P7.70 respectively.
Ms. Garin said the government is looking to encourage oil companies to take drastic measures if there is a big price move next week. – Sheldeen Joy Talavera
