PH in process of acquiring 2M barrels of fuel–DOF chief
The government is now in the process of acquiring two million barrels of oil from the global market in a bid to add 10 additional days to the country’s buffer stock of fuel, Finance Secretary Frederick Go said.
Speaking at a Philippine Stock Exchange event, Go said the Philippine National Oil Co. – Exploration Corp. (PNOC EC) had already started the procurement process, and that the new supply could arrive “any time this week.”
“They’re doing a global procurement for the oil. I believe they have a lot of offers on the table, so they’re just selecting which ones to procure,” Go told reporters. “It’s probably also the more prudent thing to do, to buy from multiple sources.”
The two-million barrel target is double the volume that the government mentioned when it first announced the procurement plan last week.
With the country’s daily oil consumption estimated at 200,000 barrels, the purchase would add 10 days to the national stockpile and extend the buffer to up to 70 days.
“The primary objective is to create that additional buffer stock. When you put out a big order into the global market, the belief is you should be able to get some economies of scale and procure at lower prices,” Go added.
Go said the government intended to accelerate the disposition of state assets to generate revenues for the procurement, hopefully as early as the second quarter of the year.
“It’s really in our program to dispose of some assets. That urgency has gone up a notch. The Department of Finance, together with our privatization group and the Privatization Management Office, just had a meeting very recently to discuss the possible assets we would like to accelerate for disposal,” he said.
With global oil prices still surging past $100 a barrel, the government is racing to approve a bill granting President Marcos the authority to reduce fuel excise if Dubai crude exceeds $80 a barrel for 30 consecutive days.
The House of Representatives has approved its version of the bill on third and final reading, while the counterpart Senate measure is still being drafted.
The Department of Finance (DOF) earlier said a suspension of excise starting in May could result in a revenue shortfall of P136 million.
But Go said that it was still too early for the Development Budget Coordination Committee (DBCC) to recommend a tax cut.
“The three-step process is: first, the legislature must give the President the authority to reduce excise taxes. Second, the Department of Energy must certify that we’re entering a national urgent situation. Then, the DBCC will have to recommend to the President to reduce the fuel taxes,” he explained.
“It’s probably too early for us to say that the DBCC will recommend to the President to reduce excise taxes on fuel. It’s only the 17th day of the war (in the Middle East), and of course, Congress and the Senate are still working on the bill,” he added.
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