The local coconut and biodiesel industries declared that they are ready to increase production in support of President Ferdinand R. Marcos’ plan to increase the mandated biodiesel blend at the pumps to three percent (B3) from the current rate (B2) as part of measures needed to address rising fuel prices.

“It is wonderful news to hear the President’s support for B3. The feedstock is available and the capacities for making CME are ready to support the increase in mandate,” said United Coconut Association of the Philippines Inc. (UCAP) Chairman Dean A. Lao Jr.

Lao, who is also the president of The Philippine Biodiesel Assocation and Chemrez Technologies Inc. -- a subsidiary of D&L Industries and the country’s largest producer of premium coco-biodiesel, noted that, “we expect many benefits to come with a B3 mandate: mileage improvement; lower pollution; import substitution and value adding of coconut oil.”

He added, “These benefits will come with no practical cost to the government, yet have extensive benefits to the country. It’s about time the country tap into this valuable resource. Congratulations to our law makers!”

Energy Secretary Raphael Lotilla said Marcos convened various concerned government agencies to discuss measures that can be taken to help bring down pump prices of both diesel and gasoline.

He said one measure considered by Malacanang was to increase the mandated amount of coco-methyl ester (CME) in diesel to three percent from the current two percent as this can be accommodated by the supply of feedstock which is coconuts or coconut oil.

“Coconut production is 15 billion nuts and an additional one percent blend will only need 2.6 billion nuts,” said Lotilla adding that, “the increase in the blend can also drive down the cost of CME because there will be a bigger market for it.”

The energy chief also pointed out that, “right now, we expect (price of) pure diesel to be at parity with CME per liter.”

The increase in the biodiesel blend will still have to be approved by the National Biofuels Board which is also headed by Lotilla.

Aside from increasing the biodiesel blend, it was also proposed during the meeting that oil companies be urged to voluntarily increase the ethanol blend in gasoline to 20 percent (E20) from the currently mandated 10 percent as this will result in a reduction in gasoline prices by more than one peso.

Lotilla said this is a price mitigation measure because ethanol is now cheaper than gasoline, explaining that, “right now, the price of gasoline without ethanol is at P56.89 then it will result in a price differential of around P1.28 or up to even P1.50 depending on prices.”

Local ethanol price per liter is P79.49, much higher than imported ethanol which costs P41.84 a liter. However, since local ethanol production is enough only for a 10 percent blend (E10), the Philippines can import ethanol for E20 and lower pump prices.

Lotilla said these are based on assumptions that gasoline costs P70 per liter while diesel is at P66 per liter.