Oil companies begin rationing

EXPECTING a demand spike because of a government-imposed freeze on pump prices, Shell, Chevron and Total yesterday said they would start rationing fuel to their gas stations based on their average volume of sales.

At the same time, the company announced it would not sell gasoline to large volume buyers at its stations, unless they are regular customers.

“These lower rates are meant for victims of calamities,” said Roberto Kanapi, vice president for communications at Shell. “We hope that subsidized products will go to the right customers.”

Shell said the rationing was part of its preparations to comply with Executive Order 839, which froze petroleum prices to Oct. 15 levels until the President lifts the state of calamity that was imposed in the wake of two devastating storms.

In a statement, Shell said it expects commercial and industrial customers to try to buy from gas stations where the fixed prices are lower than wholesale prices, which are not affected by the executive order.

“To manage this potential volume shift, which cannot be served by its retail sites, Pilipinas Shell will allocate fuel supplies to its retail stations in Luzon based on their average sales in recent months effective immediately,” Kanapi said.

Kanapi also said that “without prejudice to seeking legal remedies,” Shell would comply with the price freeze.

Shell said it is asking the Department of Energy to clarify which products are affected and how long the price freeze would last.

The company also had questions regarding the geographical coverage of the executive order, since not all areas in Luzon were affected by storm Ondoy and typhoon Pepeng.

“While the intent of the executive order is to prevent unreasonable increase in prices of petroleum products during a state of calamity, the consequences of the executive order would be supply disruptions and negative impact on the investment climate in our country. We will continue to discuss these issues with the DoE-DoJ Task Force and other relevant government agencies,” Kanapi said.

Unioil Petroleum Philippines Inc., meanwhile, assured the public that it has enough supply of diesel, gasoline and kerosene despite the warnings of a shortage raised by the oil firms.

Unioil was the first to cut pump prices over the weekend in compliance with the order to maintain prices of petroleum products at Oct. 15 levels.

“There will be no problem in the normal flow of petroleum products in all our retail stations,” Unioil general manager Chito Medina-Cue said.

Medina-Cue said they may not be able to supply the wholesale needs of customers but customers in its retail network will have ample supply of oil products.

“There is nothing to be afraid of as there is no shortage of supply in the international market for finished petroleum products. To bring in the products, we will just need three days at the most as long as the appropriate government agencies will expedite the processing of documents for the release of the imported fuels,” Medina-Cue said. –Alena Mae S. Flores, Manila Standard Today