The Department of Energy (DOE) is being asked to seriously probe the non-compliance of some oil industry players and strictly enforce the mandated biofuel blends to diesel and gasoline products being retailed at the pumps.
According to the Philippine Institute of Petroleum (PIP), which is the association of the major oil companies, there had been industry players shortchanging the volume of biofuels being mixed into the petroleum products, hence, that redounds to violation of the Biofuels Law or Republic Act 9367.
“There are reports of non-compliance to the current required blends at the retail level, which contributes to the uneven playing field,” the group noted.
The PIP similarly indicated that “there is a need for strict monitoring by the DOE at the retail level on compliance to the required biofuels – 2.0-percent for biodiesel; and 10-percent for bioethanol.”
In line with that recommendation then, the organization propounded that the DOE must beef up its manpower and resources “to effectively and regularly conduct field testing and inspection.”
It was explained that since the cost of locally-produced biofuels are comparatively more expensive – primarily those on ethanol for gasoline and coco methyl ester (CME) for diesel – there are players who are eschewing the policy and have instead been resorting to deficient blending of the required biofuels into the oil commodities.
In the view of the PIP, apart from the never-ending concern of oil smuggling, the shortchanged biofuel blends enable some players to offer lower prices at the pumps, but that comes at the expense of violating government policies and laws.
As emphasized by organization, the non-compliance to the required scale of biofuel blends could tilt the level playing field because the companies adhering to the letter of the law would be spending more; and these are subsequently passed on in their product prices, hence, it appears that they are selling their fuel commodities at a higher cost.
“The government must increase its monitoring of unreasonably low-priced products which may be because of either unpaid taxes or due to smuggling or non-compliance to PNS (Philippine National Standards) which also cover the biofuel blend,” the PIP stressed.
On proposals to increase the CME mix to diesel products, the PIP stated that before pursuing this policy, the government must first address the technical and operational issues in the industry including the feedstock availability as well as the impact on overall fuel engine reliability.
“Increasing the biofuel blend, currently 2.0-percent for CME and 10-percent for ethanol - requires a thorough study and extensive consultations with stakeholders – not only within the petroleum industry but also with stakeholders in the agricultural sector or in the automobile industry,” the PIP said.