The government is reviewing the work plan of the Philippine National Oil Co. (PNOC), including the possibility of pursuing alternative fuels, according to the Department of Energy (DOE).
“We are reviewing their work plan and projects so they can concentrate on some alternatives fuel for example (so) we don’t compete with the private sector,” said DOE Secretary Raphael Lotilla, on the sidelines of an event hosted by the Makati Business Club on Monday.
PNOC is mandated to venture on measures that will help ensure a stable supply of petroleum products in order to sustain the growth of the economy and the social well-being of the country apart from pursuing exploration, exploitation and development of all energy resources.
PNOC also currently has subsidiaries including the PNOC-Exploration Corp. mandated for the exploration, development, utilization and marketing of oil and gas and other viable energy resources and the PNOC Renewables Corp. serving as the primary government vehicle in promoting, developing and implementing renewable energy and energy efficiency programs in the country.
Lotilla said a national strategic petroleum reserve (SPR) is still being considered by the government but noted its viability is under scrutiny especially with the current global push to limit the use of fossil fuel.
“It is still in the oil emergency plan but if you continue to invest in the oil strategic reserve right now and what you have is a declining market for oil, you will have to take a look at how long will be the useful life of your investment. It is something that involves cost,” Lotilla said.
In 2021, the DOE issued a circular that serves as a guideline for the establishment of the SPR.
Under the circular, the DOE will establish the reserves while PNOC is tasked to acquire the necessary storage and blending capacity by construction, lease or other acquisition options based on the agreed minimum and maximum volume level determined by a feasibility study.
The PNOC is also tasked to acquire the appropriate supply contracts and product type portfolio that allows it to secure the necessary volume to attain the objective of the SPR that must be done “in a manner most economical and advantageous to the government.”
PNOC will also be responsible for establishing the competence to distribute products to the intended purpose of the SPR from transport logistics down to the fuel discharge to the end-consumers.
At present, minimum inventory requirements in the country is 15 days for finished products, 30 days for crude oil and 7 days for liquefied petroleum gas.
The previous administration of the DOE said before that implementing SPR will double the current inventory requirements. -J. Macapagal
