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Solon wants the future administration to establish an oil reserve facility.
MANILA, Philippines — On Monday, a senator made a proposal to President-elect Ferdinand “Bongbong” Duterte’s incoming administration “Marcos Jr. is expected to explore establishing a national strategic petroleum reserve (SPR) if local fuel prices approach PHP100 per liter.
Rep. Luis Raymund Villafuerte of Camarines Sur said one way to stabilize the retail cost of petroleum products and protect consumers and motorists from the crippling effects of sky-high oil prices is to establish a state-run storage facility that would allow the government to bring in additional inventory to help soften future price spikes.
This has been a long-planned government initiative that has “crawled at a snail’s pace” within the Department of Energy, according to Villafuerte (DOE).
“I’m hoping the BBM administration will take a close look at the SPR plan, which has been stuck in the DOE’s planning stage for more than two years,” Villafuerte said. “Our DOE officials have been talking about a national SPR for years, but they have yet to do the walk on this projected petroleum product reserve.”
He claimed that the sole promise he received was from Energy Secretary Alfonso Cusi, who stated that the Philippine National Oil Company (PNOC) will conduct a feasibility assessment on the project.
Following the most recent price modifications, the cost of gasoline has risen to over PHP95 per liter, while the cost of diesel has risen to around PHP84 per liter.
Fuel prices are likely to rise by another PHP2.40 to PHP2.70 per liter of diesel and 30 to 60 centavos per liter of gasoline this week.
This SPR plan, according to Villafuerte, should be put in place in case of future conflicts, supply disruptions, or other geopolitical changes or disasters that could drive petroleum prices up north again, out of reach of regular Filipinos.
Meanwhile, DOE Undersecretary Gerardo Erguiza Jr. said the agency will push the 19th Congress to make the revision of the oil deregulation bill a priority in order to lower gasoline costs.
The DOE, according to Erguiza, seeks to reclaim its right to interfere when oil prices rise dramatically for an extended length of time.
“We wrote to Congress, urging them to examine and evaluate the oil deregulation bill so that the government has the authority to act in a scenario like this,” Erguiza added.
He stated that the DOE has been advocating for the unbundling of oil prices in order to increase transparency in oil price fluctuations.
Because the DOE lacks the authority to interfere in the face of soaring petroleum costs, it has asked oil companies to offer discounts to customers.
The proposed modifications to the Downstream Oil Industry Deregulation Act, according to House Committee on Energy Chair Juan Miguel Arroyo, will help Filipino consumers, particularly the poor and vulnerable, cope with rising fuel prices.
The proposed regulation, according to Arroyo, would bar oil companies from boosting prices on old stock and force them to expand their minimum inventory to avoid price volatility in the local market.
Stabilizing and offering appropriate prices, increasing competition, stimulating investments, and reducing cross-product subsidies, he said, are among the key reasons why the oil business was deregulated.
The proposed revisions to Republic Act 8479 include, among other things, institutionalizing minimum inventory requirements for petroleum products for supply security and unbundling the cost of petroleum.