The Department of Energy (DOE) plans to put up a strategic petroleum reserve (SPR) which will be sourced from Russia and other non-OPEC countries in a bid to lessen the impact of rising oil prices in the international market.
DOE Secretary Alfonso Cusi directed the Philippine National Oil Company-Exploration Corp. (PNOC-EC) to prepare for oil trading and retail to provide competition to existing oil industry players and pacific oil prices.
“The government is aware of the country’s vulnerabilities to abrupt changes in the international oil situation and impending threats on the same, hence we are formulating various strategies to address those vulnerabilities to cushion the impact for our consumers,” the Energy chief said.
Cusi is ex-officio chairman of the PNOC-EC, the exploration arm of state-run PNOC.
The DOE currently requires oil companies to maintain a Minimum Inventory Requirement (MIR) of in-country stocks equivalent to 30 days of crude and products for refiners, 15 days worth of products for importers/bulk suppliers, and seven days of liquefied petroleum gas (LPG) stocks for LPG players.
The DOE is urging oil consumers to use petroleum products efficiently and wisely.
The creation of the SPR is founded on a number of joint international studies, according to the DOE-Oil Industry Management Bureau.
The Philippines and Thailand signed a memorandum of understanding in 2003 to jointly study, investigate, and assess the possibilities of cooperation. The memorandum also includes the identification of strategic locations for oil stockpiling and distribution points.
In 2004, another study was conducted by the US Department of Energy to assist the country in assessing the options and potentials for strategic oil stockpiles. They also recommended to enact legislation pertaining to the oil stockpiling program.
In the same year, Japan’s Ministry of Economy, Trade and Industry conducted a feasibility study on the development of a master plan and comprehensive scheme for oil stockpiling.
The oil price hikes was due to the movement in the international oil market and the continuous depreciation of the peso against dollar.
Oil companies raised gasoline by P0.65 per liter, diesel prices by P0.35 per liter, and kerosene prices by P0.45 per liter.