Energy dep’t announces looming fuel price hikes

The Department of Energy (DoE), true to form of its being labeled as giant oil companies’ mouthpiece, yesterday said oil prices may increase anew this week due to the Middle East political turmoil.

To mitigate its impact, Energy Undersecretary Jay Layug said the government is appealing to the oil firms to increase the number of stations offering discounts to the transport sector.

“Our primary focus now is security of supply,” Layug said.

Oil firms last week raised prices by a total of P3 per liter, the highest price increase implemented on a weekly-basis this year.

A party-list legislator, meanwhile, proposed a possible emergency fuel-sharing deal with Japan, for the Philippines to cope with a potential global oil crisis amid fears the turmoil in oil-producing Arab countries could worsen. Rep. Arnel Ty, of the party-list group LPG Marketers’ Association (LPG/MA) and a member of the House energy committee, said the Philippines could: forge an “emergency oil-sharing agreement” with one or two friendly countries that have large extra stockpiles, such Japan and the US; enter into a “forward commercial storage agreement” with an oil-exporting country; and eventually build a state-owned Strategic Petroleum Reserve (SPR), possibly via the Philippine National Oil Co., for use during extreme emergencies.

Japan had announced way back in 2007 a program to share its emergency oil stockpile with neighbors in the Asia-Pacific region, in the event of a crisis, Ty said.

“In fact, South Korea and New Zealand have since entered into emergency oil-sharing agreements with Japan,” he said.

Japan has 583 million barrels of oil in a state-owned SPR, which is essentially an extra stockpile kept in reserve in case of an emergency.

Ty said Japan has a direct interest in keeping the Philippine economy afloat with emergency oil supply, if necessary.

“There are hundreds of Japanese manufacturing firms here. Japan is also our second-largest merchandise trading partner, after the US,” he pointed out.

“For the same reasons, it is also possible for us to have an emergency sharing deal with the US, even if we have to pay a slightly higher price for the oil,” Ty said.

He noted that in the past, the US Congress had authorized partial releases from America’s SPR, which has 727 million barrels of oil, to help raise extra federal government revenues. Ayen Infante, Daily Tribune