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A 45-DAY fuel buffer isn’t something that the Department of Energy (DOE) should be proud of, says a former official of the Energy Regulatory Commission (ERC).
According to former Commissioner Atty. Josefina Patricia Magpale-Asirit, an assurance for a 45-day supply should not in any way be a guarantee since there is nothing coming in to boost its buffer for all types of fuel – diesel, gasoline, LPG, kerosene and aviation fuel.
“So we have no idea as to the inventory for each fuel type,” Magpale-Asirit was quoted in an interview with the Bilyonaryo News Channel.
AWKWARD SITUATION
Unlike COVID-19, which was a medical illness and the entire country was on a quarantine/lockdown, the former ERC Commissioner said that the country is facing an economic lockdown.
“The (continued) rising cost of fuel will definitely affect all sectors of society,” continued Magpale-Asirit who spent 17 long years in the energy sector.
She served as ERC Commissioner under the administration of the late former President Benoignoy Aquino III. After serving a full seven-year term at the ERC, she served as undersecretary of the DOE.
“We have never seen this kind of situation before and I wouldn’t want to be in the shoes of those in the energy sector now,” she said.
STILL MANAGEABLE
President Marcos on Wednesday disclosed that the country’s buffer of 45 days is manageable and that fuel supply could last beyond this despite the disruptions caused by the Middle East war. The government is lining up different alternative sources of fuel to ensure that existing contracts are met.
He further claimed that authorities are moving fast to make sure deliveries under previously signed contracts continue to reach the country, even as uncertainty initially froze communications with oil suppliers.
“In the beginning, our suppliers could not even tell us what was happening, and they couldn’t give us prices,” he told a livestreamed briefing.
“But through constant engagement and by putting new systems in place, supply has continued to come in.”
ALTERNATIVE SOURCES
Global oil markets have been jolted by escalating tensions in the Middle East, a key supply region, raising concerns over shortages and higher prices for fuel-importing countries such as the Philippines.
The country relies almost entirely on imported petroleum products, Business World reported.
The President said the government is not relying solely on traditional suppliers in the region but is also reaching out to other sources unaffected by the conflict, though he cautioned that it is still too early to say whether new contracts have been finalized.
“It would be premature to say that everything has been perfected. But things are beginning to open up,” he said, adding that he is very confident in saying that we have sufficient supply.”
MARCOS HOPEFUL
The energy department on Tuesday said the Philippines has an average fuel inventory equivalent to about 45 days of supply, though levels vary by product.
Marcos expressed confidence that additional shipments would arrive before stocks run low, ensuring a steady flow rather than isolated deliveries.
“We can be fairly confident that after 45 days, we will already have oil arriving here in the Philippines,” not just one or two deliveries but “a flow of petroleum and petroleum-related products,” he boasted.
Marcos credited the country’s diplomatic ties for helping secure continued access to fuel, noting that good relations with partner countries have played a key role in keeping supply lines open.
CROWDSOURCING
Authorities would continue exploring new sourcing arrangements while monitoring global developments, as energy prices remain vulnerable to further geopolitical shocks.
He and Energy Secretary Sharon Garin earlier claimed that the country is in talks with China, Russia, the US, South American countries, Brunei, South Korea, Japan and India for oil supply, noting the discussions yield positive results.
As a net oil importer, the Philippines is particularly vulnerable to disruptions in global oil supply and volatility in prices. It imports nearly all of its crude oil from the Middle East, with Saudi Arabia as its top supplier.
The Department of Budget and Management (DBM) has approved the release of P20 billion to the DOE to secure fuel supply for the country.
MALAMPAYA FUNDS
The funds were released on March 24 through a Special Allotment Release Order (SARO) and Notice of Cash Allocation (NCA), which was sourced from the Malampaya Gas Fund under the Special Account in the General Fund (SAGF), Business World quoted the DBM statement.
The P20 billion will fund the “strategic procurement of fuel products — including diesel, gasoline, and liquefied petroleum gas (LPG) — to boost national fuel inventory, stabilize pump prices, and ensure uninterrupted operations across transport, logistics, agriculture, emergency response, and other critical sectors.”
It will be implemented by the Philippine National Oil Company-Exploration Corporation, which has already started procurement.
NO NEED TO PANIC
The President also on Tuesday evening placed the country under a national state of energy emergency under Executive Order (EO) No. 110, noting the ongoing war’s imminent threat to the country’s energy supply. The order will be in effect for a year.
He however clarified that the declaration was only a “precautionary tool” and that only the energy sector was covered by the state of emergency.
“I want to assure everyone that this does not mean that we should panic. It means that we are doing everything that we can to assess and to alleviate the situation,” he said.
Under the EO, the President created the Unified Package for Livelihoods, Industry, Food, and Transport (UPLIFT) committee for a coordinated response in stabilizing fuel supply, sustaining economic activity and protecting sectors most exposed to rising energy costs.
SUPPLY AND PRICE
The EO also allows authorities to focus interventions on ensuring adequate energy supply and mitigating price spikes while mobilizing government resources more efficiently.
“The source of the problem is the supply and the price of energy, and that is what we need to address directly… The reason that I declared an energy emergency is to provide the government with more options should the need arise,” Marcos said.
Transport workers pursued their planned two-day strike beginning today to protest surging oil prices and demand a fare hike, which he rejected last week.
They also want him to cut or halt excise taxes on petroleum products to lessen oil prices, after the President signed into law Republic Act 12316, which effectively gave him the power to temporarily suspend or reduce excise taxes on petroleum products.