The Department of Energy (DOE) is yet to finalize plans for a national strategic petroleum reserve (SPR) pending a study that would ensure its viability and a congressional authorization for the DOE to put up one.
This is in the face of rising fuel prices due to supply problems in the world market.
Rodela Romero, director of the DOE Oil Industry Management Bureau, told the Laging Handa public briefing yesterday the agency had proposed for the crafting of a law that will grant DOE the power to put up a SPR, either for commercial or for strategic reasons to address supply disruptions that can affect the country
Romero said the DOE seeks to find out in the study the project cost needed to put up the SPR as well as its ideal capacity, withdrawal schedule and priority sectors to be served.
She added the DOE is reviewing a new terms of reference for a rebidding for the procurement of a consultancy service that will conduct the study.
This was after the first bidding failed.
But Romero said the DOE will pursue the SPR despite the pending change in administration, saying this is part of the agency’s long-term plans for national energy security.
Last September, the DOE issued the guidelines for the establishment of the SPR.
Under the circular, the DOE will establish the reserves while the Philippine National Oil Co. (PNOC) will be tasked to acquire the storage and blending capacity via construction, lease or other acquisition options based on the agreed minimum and maximum volume level.
PNOC will acquire the appropriate supply contracts and product type portfolio that would allow it to secure the volume for the SPR “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, the minimum inventory requirement in the country is 15 days for finished products, 30 days for crude oil and 7 days for liquefied petroleum gas.
The DOE had said the SPR will double the current inventory requirements.
As of February 8, year-to-date adjustments on oil prices stood at a total net increase of P6.75 per liter for gasoline, P9.15 per liter for diesel and P8.45 per liter for kerosene.
