Oil firms slam Euro 2 revival order

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The reselling of Euro 2 diesel fuels will not curb the rising oil prices.

This according to the Independent Philippine Petroleum Companies Association (IPPCA) after the Department of Energy (DOE) ordered oil companies to bring back the Euro 2 standard fuel to give motorists a cheaper fuel option.

“We cannot be forced to make significant investments nor a temporary stop gap measure for a problem that they created by imposing higher excise taxes across all fuel products,” said IPPCA in a statement.

The association was reacting to Department Circular 002018-08-0012, signed by DOE Secretary Alfonso Cusi on Aug. 10, 2018, mandating oil companies to make available Euro 2 diesel in fueling stations to soften the impact of rising commodity prices.

The energy department’s order is a band-aid solution that will require additional investments such as storage tanks, dispensing pumps, and pipes.

The group said it would be more effective to cancel the sales of prescribed biofuel blend on fuel products instead of reinstating Euro 2 diesel sales in the market.

Should the implementing rules and regulations under Republic Act 9637 or the Biofuels Act of 2006 be suspended, motorists could see a P 2 liter and P1.80 per liter decrease in the pump prices of gasoline and diesel.

The association also argued that there is not much difference between Euro 2 and Euro 4, cost-wise. International and domestic manufacturers have changed their production to Euro 4 and Euro 5, which makes Euro 2 diesel less available in the market.

Bringing back Euro 2 is against the government and industry stakeholders’ aim for a cleaner air due to its sulfur content of 500 parts per million compared to cleaner fuel that which has 50 ppm.

In addition, reintroducing Euro 2 can cause more expenses for oil companies due to installation of underground tanks at their retail outlets since Euro 4 diesel cannot be placed together with the Euro 2.

“The directive also undermines the President Rodrigo R. Duterte’s directive banning smoking in public places to protect people from the ill effects of smoking and secondhand smoke,” IPPCA told BusinessWorld, meaning that the DOE is not complying with the “Clean Air Act of 1999.”

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