The pursuit of alternative fuels is top of mind among policy planners in the pursuit of a stable and cost-effective energy sources to run the various industries, the Department of Energy (DOE) said on Wednesday.
This developed as the government ruled out its own strategic petroleum reserves (SPR) in an ongoing review of the work plans laid out by the Philippine National Oil Co. (PNOC) assessing the potential of alternative fuel sources.
“We are reviewing their work plans and projects so they can concentrate on alternative fuels, for example, (so) we don’t compete with the private sector,” said Energy Secretary Raphael Lotilla at the sidelines of a recent event hosted by the Makati Business Club.
The PNOC is mandated to ensure a stable supply of petroleum products to help sustain the growth of the economy and the social well-being of the country on top of the exploration, exploitation and development of new energy resources.
PNOC subsidiaries include the PNOC-Exploration Corp. whose mandate is the exploration, development, utilization and marketing of oil, gas and other viable energy resources as well as PNOC Renewables Corp. which serves as primary government vehicle in promoting, developing and implementing renewable energy and energy efficiency programs in the country.
Lotilla acknowledged that a national SPR is still being considered but said its viability is still under scrutiny given the global push to limit the use of fossil fuel.
“It is still in the oil emergency plan but if you continue to invest in the oil strategic reserve right now and what you have is a declining market for oil, you have to take a look at how long will be the useful life of your investment. That involves cost,” Lotilla explained.
In 2021, the DOE issued a circular as a guideline for the establishment of the SPR.
Under the circular, the DOE establishes the reserves while PNOC acquires the necessary storage and blend capacity for the construction, lease or other acquisition options based on the volume level determined by a feasibility study.
The PNOC is also tasked to acquire the appropriate supply contracts and product type portfolio that allows it to secure the necessary volume to attain the objective of the SPR which must be done “in a manner most economical and advantageous to the government.”
The PNOC is also responsible for establishing the competence to distribute products to the intended purpose of the SPR, from transport logistics down to the fuel discharge to the end-consumers.
At present, minimum oil inventory requirement is 15 days for finished products, 30 days for crude oil and 7 days for liquefied petroleum gas.
The DOE said implementing the SPR will double the current inventory parameters.
