By Lenie Lectura - January 10, 2020
THE country’s oil importation from
the Middle East could be affected should tension in the Middle East intensify,
the Department of Energy (DOE) has warned.
“In the event the situation
escalates and Iran considers the closure of the Strait of Hormuz in
the event of a broader war, the country’s oil importation from the Middle East
may be affected,” the DOE said on Thursday.
The total importation of liquid fuel
from Middle East is around 30.36 percent of the total 2019 average country
importation while the total 2019 average LPG importation is around 34.35 percent.
For jet fuel, the total importation
in the same period stood at around 27.94 percent of the total 2019 average
country importation.
In all, “the total 2019 average
petroleum products importation from Middle East is around 30.55 percent of the
total 2019 average country importation,” data from the DOE stated.
The agency has crafted a contingency
plan following an emergency meeting with oil companies last January 7.
The meeting, said the DOE, was
called to let the players give their respective updates on current supply
situation, including the supply constraints and transport difficulties being
experienced from the Middle East, and preparations being undertaken by oil
firms in case there will be blockades at the Strait of Hormuz.
“The Oil Contingency Plan was
developed by the DOE to address oil supply disruption, taking into
consideration different scenarios and levels of supply cut. The implementation
scheme radiates from the national to the local levels with measures ranging
from fuel conservation and substitution to fuel allocation and rationing,” said
the DOE.
Oil firms are required to maintain a
minimum inventory level (MIL) of in-country stocks: 30 days for oil
refiners, 15 days for bulk suppliers; and seven days for LPG players.
Scenarios
In a scenario where “Happening of
Disruption Event is imminent,” the DOE will require the oil firms to increase
and maintain a (MIL) of 60 days’ consumption level based on the past three
months’ average on all types of petroleum products per refinery and per depot.
In an event where “Disruption
actually happened and supply cut becomes real,” the NSC, with the
assistance of the OCTF as its secretariat, shall temporarily take over the
operation of the downstream oil industry to implement fuel rationing, prohibit
exports, direct price freeze and price ceiling, implementation of conservation
measures and alternative sources of fuel.
During the meeting, the oil firms
said there were no issues on oil supply disruption nor difficulties were yet
being encountered. The only concern they relayed to the DOE is the impact of
the current situation on prices of petroleum products.
The DOE said their inventories are
“healthy at levels above the minimum inventory requirement”.
Inventory
report
Meanwhile, 14 oil companies and a
few LPG (liquefied petroleum gas) distributors handed over to the DOE their
inventory report on petroleum products, the agency said Thursday.
The DOE said it is still collating
the data, a day after imposing the January 8 deadline on oil companies.
Based on initial data, these oil
firms submitted their oil inventories: Petron Corp., Pilipinas Shell, Phoenix
Petroleum, Seaoil Philippines, PTT Philippines, Chevron Philippines, Filoil,
Insular, Jetti, Microdragon, Petrotrade, SL Harbor Bulk Terminal Corp., Unioil,
RK3.
LPG players that complied with the
DOE directive are Pryce Gas, SPI and Petron.
The DOE has directed the oil firms
to use up their 2019 oil inventories before applying the last tranche of tax
increases under the Tax Reform for Acceleration and Inclusion (TRAIN) law that
took effect January 1, 2020.
Oil firms with the capability to
refine crude oil in the country keep a 30-day inventory. The crude oil needs to
be refined, which will result in the finished product that is then sent to
various service stations and then sold to consumers.
DOE figures show that gasoline
prices will increase by P1.12 per liter, diesel by P1.68 per liter, kerosene by
P1.12 per liter and LPG by P1.12 per kilo.
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