Should the Philippines enter an oil importation agreement with Russia, the Department of Energy (DOE) said that Petron Corporation should be included in the discussion considering the crude oil’s compatibility in the company’s refinery.
In a Manila Bulletin report, DOE Oil Industry Management Bureau director Atty. Rino Abad said that the crude oil from Russia would have to undergo testing to see if it’s compatible with the specifications of the crude being processed in Petron’s refinery. From there, it will be determined if the crude commodity will be sourced from Sakhalin, Volga, or Siberia or from other oil producing regions of Russia.
Abad said that Petron would be an essential party to include in the Philippine-Russia oil supply deal talks as it’s the only player in the country with its own refinery.
Petron is currently sourcing its crude requirements from the Middle East, and the commodities are being lifted at commercially-traded prices. Under Republic Act 8479 or the Oil Deregulation Act, local oil prices are evaluated based on global prices.
Meanwhile, Abad said that should the oil importation agreement push through, preferential pricing would need to be set to help lower fuel costs.
The DOE said that since it would be a government-to-government deal, it would most likely not follow commercially-traded prices.
The country would also need to resolve the use of petrodollar – or the notional currency used by oil-producing countries in exporting oil commodities – prior to entering a deal with Russia following the ban on Russian oil enforced by the European Union countries with strong support from the United States.
The government would need to clarify if the use of US Dollars on oil purchases from Russia would affect the country’s diplomatic ties with America.
In a courtesy call with president-elect, Ferdinand Marcos Jr. this week, Russian Ambassador Marat Pavlov said that Russia is willing to help the Philippines find other sources of fuel amid the continuous rise in prices.