Hefty fuel prices take effect

MANILA, Philippines — The oil companies have raised pump prices of gasoline by P2.35 per liter, the heftiest weekly increase so far this year, following a destructive attack on production fields in Saudi Arabia.

Petron, Shell, Seaoil, PTT Philippines, Phoenix Petroleum and Total have also announced a P1.80-per-liter increase in prices of diesel.

Petron, Shell and Seaoil also raised prices of kerosene by P1.75 per liter.

For diesel and kerosene, these were the second biggest weekly hikes so far for the year. The biggest were P2.30 and P2 per liter, respectively, on Jan. 15.

Supply plans

Sen. Sherwin Gatchalian, chair of the Senate committee on energy, on Monday called on the Department of Energy (DOE) to spell out medium-term and long-term plans to shield the Philippines from possible price spikes and supply disruptions.

“We want to understand from the DOE as well as other government agencies our response and we want to also understand the contingency measures if ever the situation in Saudi Arabia and the Middle East will get worse,” Gatchalian said in a statement.

“We also [want to] understand the contingency measure in place or will be in place so the markets will come down so that the public will be assured that there will be no supply disruptions to our transportation as well as our industries,” he said.

Contingency task force

The DOE said that as an immediate response, it had called for the reconvening of the interagency Oil Contingency Task Force to formulate strategies to deal with possible supply disruptions.

‘Cheaper diesel’

The task force, led by the DOE, consists of representatives from the departments of trade and industry, agriculture, national defense, local government, transportation, foreign affairs and the National Security Council.

For the medium term, the DOE’s plan is to have state-owned Philippine National Oil Co. (PNOC) import “cheaper diesel.”

The DOE and PNOC floated this idea in 2018—an effort that did not take off—amid large increases in oil prices when major oil-producing countries agreed to cut back their output in an effort to raise prices.

This was met with opposition from the oil companies and environmentalists who noted that what the DOE wanted was to reintroduce in the Philippine market lower-grade or “dirtier” diesel.

For the long term, the DOE is pushing for passage of a law that would require a strategic national oil reserve.

On Monday, the major oil companies assured the Senate that the Philippines would have enough supply of fuel despite tensions in the Middle East.

Fernando Martinez, chair of the Independent Philippine Petroleum Companies Association, said local oil companies could readily source refined and crude oil from other countries if oil fields in Saudi Arabia would cease to operate. —Reports from Ronnel W. Domingo and Marlon Ramos