The Department of Energy (DOE) has urged oil firms to make sure the country has enough fuel supply given that the Organization of the Petroleum Exporting Countries (OPEC) will be slowly raising production levels even if demand is rising faster.
In a statement, Energy Sec. Alfonso Cusi also called on petroleum companies to come up with plans to mitigate possible price hikes of oil products in the coming months.
Oil firms are required to maintain a minimum inventory of petroleum products, in compliance with Executive Order (EO) 134 signed by former Pres. Gloria Macapagal-Arroyo. The DOE then implemented the EO through a department circular it issued in 2003, which requires a minimum inventory worth 15 days of supply for petroleum products, and seven days for liquefied petroleum gas.
Refiners, meanwhile, are mandated to maintain a minimum crude and petroleum product inventory worth 30 days.
The DOE said OPEC will only be gradually adding supply to the market, which would then result in higher pump prices.
“From August to December 2021, OPEC will only be enforcing a 400,000 barrel-increase per month, which is, however, expected to even out the supply-demand balance by the end of 2021,” the department said.
Some global events that may trigger oil price hikes include “aggressive demand” in the fourth quarter which is expected to hit as much as 103 million barrels per day (mbpd) of crude oil.
Then, there’s also the continued sanctions against Venezuela, which is expected to remain for the foreseeable future. The said sanctions take away a potential supply of about one to two million barrels of crude oil supply per day from the world market.
On Tuesday, pump prices went up by Php1.45 per liter (L) for gasoline and Php2.05/L for both diesel and kerosene.
“The DOE will continue to closely monitor global oil supply and price movements. As always, we are working with the downstream oil industry players to ensure that all mechanisms to protect our consumers against the impact of such developments as much as possible,” said Cusi.