Tuesday, October 23, 2018

PNOC-EC pushes cheaper diesel importation option


Published By Myrna M. Velasco

Energy Secretary Alfonso G. Cusi is bent on giving mandate to state-run Philippine National Oil Company-Exploration Corporation (PNOC-EC) to go ahead with its planned P2.0 billion worth of diesel importation from Singapore and will let smaller oil firms handle product distribution.

He qualified that the distribution of the imported fuel shall be done “through smaller oil companies and other bulk buyers.”
The energy chief said these smaller oil players would then serve as the “selling network” of the government-sanctioned imported diesel – or for them to retail the diesel products at the pumps to the end-users.
The PNOC-EC board, in which Cusi sits as ex-officio chairman, had already given the green light to the state-run company on the offshore procurement of diesel products.
As sounded off by PNOC-EC President Pedro Aquino, the diesel to be bought from Singapore can be dangled to the consumers at a price cheaper by P5.00 per liter.
The Department of Energy (DOE) and PNOC-EC have been fiercely quizzed though on how they shall distribute the products to targeted buyers – primarily the public utility vehicles (PUVs) and targeted industries.
Cusi said the intent of the diesel importation is for PNOC-EC to “really become part of the supply chain, so it can understand how markets behave in the deregulated downstream oil sector.”
On last week’s counter-offer of Petron to sell lower cost diesel to the government, Cusi said he would prefer that the leading oil firm would directly reflect that as discount at its pumps.
“That’s a very good development, but I am hoping that Petron will instead give that directly as cost reduction in the products it is selling so consumers would benefit from it,” he stressed.
The energy chief added “it can be done better that way, because it will no longer go through the procurement process of government, which may still involve a very complex undertaking.”
Cusi has been batting for unbundling of the per-line-item costs of the oil companies, with him emphasizing that he wants to know what margins or return on investments the industry players have been raking in for every liter of gasoline or diesel sold at the pumps.

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