Proposals for state-run Philippine National Oil Company (PNOC) to re-enter oil marketing and trading have surfaced to help mitigate the prices of fuel in the country.
In a report by the Manila Bulletin, the proposal would allow the government to become a “price leader” and offer cheaper petroleum products for public utility vehicle (PUV) drivers, and also to a wider body of commercial and industrial end-users.
PNOC Board Director Rex Tantiongco said that the re-entry of PNOC into the industry must be done with an arrangement of Petron Corporation, the country’s lone refiner.
Tantiongco added that a government-government deal when purchasing crude commodities can be explored with oil-producing countries at a discounted price, much like the ‘oil diplomacy straregy’ implemented under the reign of the late president Ferdinand Marcos Sr.
With the proposed method, PNOC will have the authority to sell petroleum products at a lower price, without resorting to below-market pricing.
Tantiongco added that PNOC, or even its subsidiary PNOC-Exploration needs to be expanded into consignment or marketing, and tolling or business agreements with a privately owned refinery, and oil companies with wider distribution and marketing facilities across the country.
The PNOC official said that Petron would be the ideal partner for the strategy as the oil company has 62 gasoline stations and 27 depots with lease arrangements with the country’s biggest oil company.
Income from the possible venture can be used as a subsidy for PUV drivers and other critical sectors when there are radical price spikes in pump oil without having to indulge in below-market pricing.
Earlier, the Department of Energy also asked for the inclusion of Petron should the country enter an oil importation agreement with Russia, considering the crude oil’s compatibility with the company’s refinery.