The Department of Energy has finally issued the much awaited guidelines for the use of locally produced ethanol, a move that is expected to provide a vital boost for the ailing industry.
The department circular published yesterday contained provisions that would ensure that all ethanol produced in the country would be purchased prior to the purchase of cheaper ethanol abroad.
It likewise states the obligations of concerned stakeholders, namely the bioethanol producers, oil companies, the National Biofuels Board, and the DOE’s Renewable Energy Management and Oil Industry Management Bureaus.
More importantly, the circular also appointed the NBB to “publish a monthly price index for bioethanol every first day of the month based on data from the Sugar Regulatory Administration and Department of Agriculture to determine the reasonableness of the price of locally produced bioethanol.”
In a phone interview, Rosemarie S. Gumera of the planning and policy department of the SRA, explained that the monthly price index would become the official reference or basis for price and supply negotiations between oil companies and ethanol producers.
Starting in August this year, oil companies were mandated to produce gasoline with 10 percent ethanol, with exemptions for the higher and lower octane gasoline. The full implementation of this 10-percent blend will be implemented in February 2012.
The transition period given to all concerned stakeholders of the local ethanol industry would allow them to increase ethanol supply and firm up the necessary agreements for the mandated blending.