DOE: Fuel unbundling, strategic oil reserve plan eyed to cushion impact of price hikes

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Metro Manila (CNN Philippines, March 8) — Apart from additional subsidy, the Department of Energy (DOE) is looking at measures that can be taken amid non-stop fuel price hikes, including a call to amend the Oil Deregulation Law and a review of the country's capability to have its own oil reserve.

Speaking to CNN Philippines' The Source on Tuesday, Energy Undersecretary Gerardo Erguiza echoed the Cabinet's Economic Development Cluster proposal to double the budget of fuel subsidy for transport drivers to ₱5 billion and the fuel discount vouchers for farmers and fisherfolk to ₱1.1 billion.

RELATED: PH economic team proposes doubling fuel subsidy budget for PUVs to ₱5B 

He also reiterated the DOE's proposal to Congress to amend the Oil Deregulation Act of 1998 which will allow the agency to intervene in the operation of facilities amid global oil prices.

The department is primarily pushing for the unbundling of petroleum retail products in order for oil firms to break down additional cost components that changed the retail prices.

"This is separating the benchmark price from the additional cost of oil sold in the retail market. In these additional costs, we might be able to see items where we can lower the price," Erguiza said.

He noted that the DOE's hands are tied because of a local court's temporary restraining order on the department's circular requiring oil firms to unbundle their prices.

Erguiza assured the public the country is not yet experiencing any fuel shortage and DOE is closely monitoring firms and their minimum oil inventory requirement of 40 days' supply.

"DOE also came out with a policy to involve the PNOC (Philippine National Oil Company) na magtayo ng strategic petroleum reserve which is a concept borrowed from other countries. Mag-iimbak ito ng oil products for extreme circumstances, kaya lang nasa feasibility study stage pa lang," he shared, noting that they have yet to determine if there would be sufficient funding and if the initiative will be good for the country.

[Translation: DOE also came out with a policy to involve the PNOC to assess the capability of putting up our own strategic petroleum reserve which is a concept borrowed from other countries. We will stock up on oil products for extreme circumstances but this is still in the feasibility study stage.]

Erguiza also called on presidential candidates to lay down their energy agenda for the country to address the crisis.

On Tuesday, oil companies increased prices of gasoline by ₱3.60 per liter, diesel by ₱5.85/l, and kerosene by ₱4.10/l.

The House of Representatives on Monday discussed the possibility of suspending fuel excise taxes to temporarily cushion the financial burden on the transport sector.

House ways and means chairperson Joey Salceda also urged President Rodrigo Duterte to call a special session by March 15 if global oil prices remain above $100 per barrel.