By Genalyn Kabiling
The administration is pursuing the importation of 200 metric tons of cheaper oil from Russia, Thailand, and other alternative suppliers in less than six months to ensure the country’s energy security.
Energy Undersecretary Felix William Fuentebella said the planned oil importation, which would be conducted through government-to-government negotiation, aims to establish a petroleum reserve and foster competition in the oil industry.
The Philippine National Oil Company-Exploration Corporation (PNOC-EC) has already been directed to prepare for oil trading to cushion the impact of the soaring oil prices in the world market.
“Energy Secretary Alfonso Cusi has directed the PNOC-Exploration Corporation to have a third level of reserve called stockpiling. This involves discussions with oil producing countries like Russia to have additional supply,” Fuentebella said in Filipino during a Palace press briefing.
“This is not a private-to-private transaction. This is a government-to-government transaction. This is not business. This is energy security function,” he said.
Asked how soon the government will start the oil imports from Russia, Fuentebella said: “The secretary said as soon as possible with a warning that it will be closely scrutinized every step of the way so we will ensure the transaction will be beneficial not disadvantageous.”
When asked if it will be done in six months, he said: “Actually, hopefully, earlier than that.”
He noted that the PNOC has already secured some storage facilities that will be used for energy stockpiling, including a facility in Subic.
Funds from the government-owned and -controlled corporation would be used for the planned oil imports, he added.
President Dutertehad earlier ordered the Department of Energy to explore the possibility of buying cheaper oil from Russia and other non-Organization of the Petroleum Exporting Countries (OPEC) suppliers to help ease the impact of high oil prices on consumers. The government intends to compete with oil industry players and pacify local oil costs.
In the Palace news conference, Fuentebella admitted that the 200 metric tons or 240 million liters of diesel imports from alternative suppliers was still “too small” to immediately bring down the domestic oil prices.
He noted that the amount was only equivalent to three days of supply.
But the energy official said the latest government “out-of-the-box” approach would create a “ripple effect” on oil trading and stir up competition among oil industry players.
“We are exploring all these different venues to circumvent the present setup involving non-OPEC and OPEC countries. We are utilizing the government-to-government relationship, he said.
“It will enhance competition and thereby would have an impact on prices. So it’s not just for energy security but enhancing competition,” he added.
At present, the energy department requires oil companies to keep a minimum inventory of 30 days of oil for refiners, 15 days for importers, and bulk suppliers, and seven days for liquefied petroleum gas stocks.