Updated
By Myrna Velasco
The Department of
Energy (DOE) was urged on Thursday by Senate Committee on Energy Chairman
Sherwin T. Gatchalian to come up with short-to long-term mitigating measures
that the country can lean on amid oil price shocks triggered by geopolitical
events such as the drone strike on the facilities of giant oil producer Saudi
Aramco last weekend.
In a resolution,
Gatchalian is seeking an inquiry into the short, medium, and long-term plans of
the DOE “to mitigate the adverse repercussions of supply shocks on Philippine
oil supply and prices.”
As of mid-week or four
days after the attack on the Saudi oil kingdom’s facilities, the anticipated
cost impact of the extreme upswing in prices had already been hitting as much
as P2.73 per liter.
Gatchalian said “this attack on Saudi Aramco and the brewing conflict in the
region raises concerns on the availability of supply and its effect on oil
prices in the Philippines, specifically in the transportation and power
generation sectors.”
As fleshed out, 68
percent of petroleum consumption in the country is attributable to the
transport sector; 11percent for commercial use; 5 percent for power generation;
5 percent for manufacturing, and 11 percent for other industries such as those
in agriculture, mining, and construction.
Gatchalian similarly
indicated that such unpropitious incidents could portend very far-reaching
implications on the country’s energy security agenda.
Gatchalian prodded the
DOE to be proactive in apprising the public of the consequences of certain
events that could affect not just their pockets or paychecks, but other facets
of their daily lives as well as the overall Philippine economy in general.
Primarily, he noted that consumers must be kept abreast of the expected impact
of the Saudi Aramco attack on oil prices and supply; that the DOE must lay down
its short and medium-term plans and strategies to ensure continuous and
sufficient supply; and long-term plans “in order to prevent vulnerability to
price shocks and insulate consumers from unexpected shortages and sharp price
increases.”
The Paris-based
International Energy Agency (IEA) indicated that based on its ‘regular contact’
with Saudi Energy Minister Abdulaziz bin Salman, the oil kingdom has been
reiterating its commitment “to ensure that global oil markets remain well
supplied,” with ample stocks that the market can also draw from in case of
shortfalls.
IEA Executive Director
Fatih Birol noted the “recent events are a reminder that oil security cannot be
taken for granted, even at times when markets are well supplied, and that
energy security remains an indispensable pillar of the global economy.”
Among the IEA-member countries, it emphasized that they hold about 1.55 billion
barrels of “emergency stocks” in government-controlled agencies – which could
redound to about 15 days of total world oil demand.
“These can be drawn
upon in an emergency collective action and would be more than enough to offset
any significant disruption in supplies for an extended period of time,” the
global energy think tank said.
The IEA-member
countries also has 2.9 billion barrels of industry stocks as of end-July, which
is actually on a two-year high and this can cover more than a month of world
oil demand.
“These stocks include
about 650 million barrels of obligated emergency stocks – which can be made
immediately available to the market when governments lower their holding
requirements,” it said.
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