The Department of Energy (DoE) on Wednesday allayed fears of imminent fuel supply shortages and possible rationing over the next several weeks as tensions in Iraq, a major global oil supplier, continue to mount.
In a phone interview, Energy Undersecretary Jose M. Layug Jr. said that inventory levels are still at 30 days’ worth of fuel supply for the refiners and 15 days for importers of finished petroleum products.
Layug said that rationing was a contingency measure of last resort and will be implemented when inventory levels fall to precarious levels or when the DoE starts receiving reports from oil companies that they can no longer supply fuel requirements.
“We are now reviewing our contingency plan last year. We have specific actions or measures that we can employ if the supply is cut off by 30 percent, 50 percent or, worse, 70 percent. After the review, we will submit it to the interagency energy contingency committee (IECC) for approval,” Layug explained.
Under Administrative Order No. 6, all departments involved in the IECC are tasked to carefully study and evaluate the government’s strategy in addressing situations arising from possible energy supply disruptions.
This was issued in 2011 when Philippine fuel supplies were threatened by the escalating tensions in the Middle East and North Africa. Also issued last year were department circulars mandating oil companies to maintain a 30-day inventory level for refiners and 15 days for finished products importers.
For this year, the ongoing tensions in Iran are threatening the closure of the Strait of Hormuz, a key sea oil trade route in the Arabian Gulf. This is a significant concern for the Philippines since the country sources roughly 70 percent of its crude oil from the Middle East.