The Manila Electric Co. (Meralco) said the pricing mechanism of fuel from the Malampaya gas field should be reviewed to lessen exposure to foreign exchange movements.
Citing a study on comparative power prices made by Australia-based International Energy Consultants in 2012, Meralco said fuel from the indigenous resource is currently priced wholly in US dollars and is indexed to world crude oil prices.
“In these aspects, being priced in foreign currency and having prices that move up or down with world oil prices, Malampaya acts like an imported fuel. Still, the field does provide a measure of energy security,” said Lawrence Fernandez, Meralco vice president and head of utility economics.
“In the ongoing discussions regarding Malampaya supply, we respectfully recommend that pricing be reviewed to reduce exposure to foreign exchange and world oil prices, so that the country may more fully benefit from the indigenous nature of the fuel,” Fernandez said at a Senate hearing on Tuesday.