DOE remits OPSF leftovers to national government for COVID-19 response

Cusi virtual roundtable

The Department of Energy (DOE) has recently remitted to the national government a “residual cash pool” worth Php370 million from the former Oil Price Stabilization Fund (OPSF).

Energy Sec. Alfonso Cusi said the DOE returned the said amount “stranded” in its coffers to help the government’s efforts to combat COVID-19. He added that while the amount may be small, it will trigger a multiplier effect on the economy.

The OPSF was used as a buffer to absorb or cover for fluctuations in crude oil and foreign exchange costs from 1987 to 1996.

The government initially shelled out the seed money to establish the OPSF, but oil firms eventually contributed whenever global crude prices were low, then withdrew from it when prices went high.

Oil prices, however, steeply rose in the early 1990s, which caused the OPSF to rapidly deplete and eventually fall into deficit. This later led to the fund’s abolition in 1996 and the deregulation of the country’s oil industry in 1998.