The Department of Energy (DOE) reiterated that local energy companies must consider the government’s goal to secure fuel supplies from competitive sources to address the impact of high prices in the world market.
Raphael Lotilla, Energy Secretary, during a briefing hosted by the Economic Journalists Association of the Philippines yesterday, echoed President Ferdinand Marcos Jr.’s statement last week that the Philippines is not isolating Russia as among its preferred fuel sources.
“As we have learned from Ukraine, there is always the threat of war breaking out somewhere in some parts of the world and this has to be taken into account as well by our downstream oil industry,” Lotilla said.
However, he explained that the decision whether to buy fuel from Russia is still dependent on the country’s local fuel players as the regime is currently unregulated.
Lotilla added that local oil companies are also currently locked into long-term supply contracts that need to be taken into account.
Last week, Marcos said the country may eventually deal with Russia for the supply of fertilizers apart from fuel.
Based on data from the DOE, as of end 2021, the Philippines imported a total of 4,721 million liters (ML) of crude oil, 9.9 percent lower from 2020’s 5,238 ML.
Majority of crude oil imports for the period originated from Saudi Arabia at 3,030 ML or 64.2 percent, followed by United Arab Emirates at 727.2 ML or 16.1 percent; Oman with 456.2 ML, 10.1 percent; Russia with 112 ML, 2.4 percent; Iraq with100 ML, 2.1 percent; and Brunei with 91 ML or 1.94 percent.
As for imported finished petroleum products for the period, the country purchased a total of 18,694 ML, up by 14 percent from 2020’s 16,394 ML.
China was the top supplier of finished products in the country with an import share of 30 percent, followed by Singapore with an import share of 17.3 percent.
South Korea accounted for 12.9 percent; Malaysia, 11.4 percent; Brunei, 4.8 percent; India, 4.2 percent; Thailand, 3.1 percent; Taiwan, 3 percent; UAE, 2.6 percent, Saudi Arabia, 2.1 percent; Japan, 1.98 percent; Algeria, 1.4 percent; USA, 1.08 percent; Qatar, 1.02 percent; Australia, 0.97 percent; Kuwait, 0.85 percent; and the remaining 1.2 percent from other countries.
Lotilla added the country’s power supply situation next year is likely to be difficult, with some hydro plants expected to be unable to deliver electricity.
Lotilla said he was encouraging the increased use of renewable sources of energy, which could help ease the impact of high fuel prices.
The country has sufficient power supply for the rest of the year, but Lotilla did not rule out “yellow alerts” – which are issued by his department whenever reserves are thin and thus could potentially cause outages.
The Philippines remains dependent on fossil fuels for electricity generation, but Lotilla has sought to ramp up support for renewables.
“In 2023 the situation is a bit difficult especially in the summer months. The scenario…shows several yellow alerts and possible red alerts in 2023,” he said. Red alerts are issued when supply is insufficient to meet demand. – with Reuters
