AFTER starting on the wrong foot, the Maharlika Investment Corporation (MIC) is finally talking about something that would serve the very purpose for which it was created.
During the 13-panel Legislative Energy Action and Development Joint Committee, MIC President and Chief Executive Officer Rafael Consing hinted at the idea of investing in an expanded oil storage facility that would protect the country from future oil surges triggered by conflicts among oil-producing countries.
According to Consing, the idea is to construct an oil storage facility under a consortium model, with the Philippine National Oil Company (PNOC) providing the land, while the MIC and the private investors will shoulder the financial requirement and the private sector into tank farms.
Once completed, the private sector will handle the operation aspect of the oil storage facility.
“That [consortium model] would expand storage capacity without forcing the MIC itself to take direct market risk on fuel inventory,” Consing said.
“That is an intermediate term plan. I envision that to be a solution that will come maybe about two to three years from the time we, in fact, start working,” he added.
The price of the landed fuel or the refined fuel imported overseas has gone up by about 60% to 70%. As such, Consing said retailers have to cash out 60% to 100% more in working capital just to be able to retain the old inventory.
“That, I think, is what we should look at as a nation. How can we help them? This idea of storage or a strategy regarding storage, I must admit, it is a reaction to the existing situation because we were not thinking, we were not anticipating this event. Now that we already have this and we’ve studied it… in fact, we are aiming for three levels of solutions,” Consing averred.
Local pump prices have soared exponentially since the war between US-Israeli forces and Iran broke out on February 28. The Philippines imports 98 percent of its local demand from the Middle East.
Access to Strait of Hormuz, a major passageway for oil supply worldwide, has been severely constricted by a blockade of Iranian forces, as well as another blockade of American ships.
With delivery of supply on hold, fuel prices have already breached P100 per liter over the last two weeks, triggering a domino effect on the cost of food, energy, transportation, among others.
