PH to import cheaper diesel from Russia

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Metro Manila (CNN Philippines, May 30) — The government has taken steps to import cheaper diesel from Russia, Malacañang said Tuesday.

In a press briefing in Mountain Province, Presidential Spokesman Harry Roque said Energy Secretary Alfonso Cusi had informed him of the importation conducted by the Philippine National Oil Company Exploration Corporation (PNOC-EC), to help address the rising cost of fuel.

"Ang landed cost po dito kasama na 'yung cost, insurance and freight sa Pilipinas is estimated only to be between ₱25 to ₱27," Roque said.

Russia is not a member of the Organization of the Petroleum Exporting Countries (OPEC), the consortium where the Philippines often outsources its oil. This is the first time it's importing from Russia.

The Presidential Spokesperson added diesel from Russia may still need to be processed further in Singapore before it reaches the country.

"Tinitingnan na kung pwedeng diesel from Russia pero baka kinakailangang pang i-subject daw to additional processing sa Singapore before we can use Russian diesel. But at half the price, maski may additional cost ang reprocessing sa Singapore, I think it will be a lot cheaper than current prices of diesel," he added.

[Translation: We're looking if we can import diesel from Russia directly, but we may need to have Singapore process it before we can use the supply. But at half the price and additional costs in Singapore, I think it will be a lot cheaper than current prices of diesel," he added.

Roque said two oil companies, Petron and Phoenix Petroleum have "voluntarily offered" to tap the expected cheaper diesel supply from Russia once it is in the country.

"Mr. Ramon Ang (Petron President and CEO) and Mr. Dennis Uy (Phoenix Petroleum President and CEO) said that if we are able to import cheap diesel, they will sell it more or less at the price we're able to import it," he said.

Earlier, Roque said it is also looking into importing oil from Venezuela, an OPEC founding member. But the South American country is facing its own oil crisis, after production in the country went down 20 percent from 2017.

In 2017, the Philippines' petroleum product imports totaled 97,530 thousand barrels — an increase of 11.8 percent from 2016. The import mix was mostly diesel oil at 41.5 percent last year, according to the Department of Energy.

Global prices of oil jacked up in previous days, affecting local supply prices. However, the Tax Reform for Acceleration and Inclusion (TRAIN) law also affects oil prices in the Philippines due to its provisions on fuel excise tax.

The prices for both Brent crude oil and Dubai crude oil, both benchmarks of global oil prices, hover around the $75 per barrel mark. TRAIN's provision prevents the increase of the excise tax on fuel should the price of Dubai crude oil stay at the $80 per barrel mark from October to December this year.

Several lawmakers are calling for the suspension of the fuel excise tax provision of the TRAIN given its effect on the prices of basic goods and services.

CNN Philippines' Ina Andolong and Chad de Guzman contributed to this report.