1M barrels of diesel expected this week, good for 5 days
The first batch of the more than 1 million barrels of diesel procured by the government is expected to arrive this week and would be enough to cover domestic demand for five days, according to Executive Secretary Ralph Recto.
“[T]he oil diplomacy ably conducted by energy officials led by Secretary Sharon Garin has resulted in the firm order of 1.04 million barrels of diesel, with the first batch arriving this week,” Recto said in a statement on Sunday.
The fresh supply pacts, translating to 165.67 million liters, form part of the Marcos administration’s target to purchase 2 million barrels of diesel, with an investment of about P20 billion under the Department of Energy’s (DOE) Emergency Energy Security Program.
These contracts aim to augment the fuel supply amid the challenges brought by the Middle East conflict and were finalized through the state-owned Philippine National Oil Company Exploration Corp. (PNOC-EC).
The government did not disclose its partner suppliers, but said it was exploring all potential providers, not just in Southeast Asia, but also Japan, Canada and the United States.
Recto added that Indonesia also gave its “ironclad guarantee” of a steady supply of coal, which is used to run the country’s power plants.
President Marcos, who assured earlier that the country has sufficient crude oil supply until June 30, has declared a national energy emergency on March 24.
National emergency
The President, however, should declare a state of emergency—not just a state of national energy emergency—so the government could better address the energy and price shocks in local and global markets, economist Sonny Africa said.
Africa, executive director of think tank Ibon Foundation, warned that haphazard enforcement of special powers might worsen the current situation and put the poorest of the poor Filipinos in jeopardy.
He said a state of national emergency would allow the government to fully enforce price caps on fuel and basic commodities to truly uplift the lives of struggling Filipinos.
“So there will be no ambiguity, the President should declare a national emergency,” Africa said in an interview on dzBB on Sunday.
Under this situation, he explained, the government “has no choice” but to invoke the emergency powers given to the President to control the prices of fuel and basic goods under the oil deregulation law and Price Act, respectively.
“The government cannot just allow the people to bear the burden of the rising prices by themselves,” Africa said.
“If price ceilings are implemented, then the government can share this burden with the profit of private companies. We need to strike a balance between the hardship of the government and the potential loss of profit of companies,” he said.
Besides the current state of national energy emergency, the country is also still under a yearlong state of national calamity, in line with Proclamation No. 1077 which Mr. Marcos issued in November last year following the devastation left by Typhoon “Tino” (international name: Kalmaegi).
The proclamation of such emergencies are among the conditions for the suspension. of the fuel excise under Republic Act. 12316, which the President enacted on March 25.
Storage facilities
Meanwhile, House Minority Leader Marcelino Libanan said the government should establish petroleum storage facilities to ensure that the country will have buffer stocks in times of crisis.
In a statement on Sunday, Libanan called on the PNOC to invest in coastal petroleum storage facilities as this would help shield the country against global supply shocks and oil price hikes caused by the Iran war.
“The oil crisis caused by the US-Israeli war on Iran clearly underscores the urgent need for the government, through PNOC, to establish its own emergency fuel reserves,” Libanan said.
“We need a government-managed buffer stock of key petroleum products—particularly diesel, gasoline and jet fuel—that can be rapidly deployed during times of crisis,” he added.
Libanan also urged the PNOC to prioritize the Visayas and Mindanao when choosing locations to ensure a “more balanced and accessible fuel distribution across the country.”
The government can also look into the storage facility of the Philippine Coastal Storage and Pipeline Corp. (PCSPC) located in Subic Bay Freeport Zone as a potential model, he said.
He noted that the 160-hectare complex has a capacity of 6.3 million barrels, or around 1 billion liters, of fuel products. The facility, which is owned by a US-based private equity firm, currently serves Luzon, including much of Metro Manila.
“Developing coastal petroleum storage facilities is fully aligned with PNOC’s core mission, and a national buffer stock would help extend the country’s ability to withstand severe global or domestic energy disruptions,” Libanan said. —WITH A REPORT FROM GILLIAN VILLANUEVA
