The country’s economic managers rejected the Philippine Coconut Authority’s (PCA) proposal to increase the coconut methyl ester (CME) content in local biodiesel as farmers continue to suffer from plummeting copra prices.
Increasing the CME content in local fuel could have been the sector’s saving grace in a weakening coconut industry, but according to PCA Administrator Romulo dela Rosa, economic managers were afraid that the move would further increase pump prices.
Computation by the Asian Institute of Petroleum Studies Inc. showed that once implemented, there would be a potential increase in diesel prices by around P0.45 centavos a liter.
So far this year, prices of diesel rose by P13.40 a liter on the back of higher global oil rates. In Metro Manila, diesel prices are now within the range of P45.05 to P50.29 a liter.
Dela Rosa said that while the agency understood the additional burden it might cause consumers, he noted that coconut farmers were among the poorest in the country, adding that “the one-time increase can be justified.”
“They should look at it from all sides. This will improve the purchasing power of three million coconut farmers. That’s three million households,” he said.
Dela Rosa added that increasing the local component of the country’s biodiesel “makes more economic sense” when world prices of petroleum go up.
As of the second week of October, the farm-gate price of copra has fallen by close to 50 percent year-on-year to P19.09 a kilo from P37.02 last year.
Global crude coconut oil prices also plummeted to $880 a ton from a high of $1,850.
The PCA has already urged the National Biofuels Board to consider its proposal, given that under the government’s Philippine Energy Plan for 2012 to 2030, local diesel must contain at least 5 percent CME by 2020.