DOE preparing for ‘worst’ for PH fuel situation amid Middle East conflict

The Department of Energy (DOE) on Tuesday is preparing measures to mitigate the impact of the ongoing tension in the Middle East on the country’s petroleum supply and prices situation.

At a press conference in Taguig City, Energy Secretary Sharon Garin reiterated President Ferdinand “Bongbong” Marcos Jr.’s earlier statement that the country has adequate fuel supply, noting that “the latest inventory is triple the minimum inventory for oil companies [of 15 days].”

“On average, 45 days. Some are even up to 60 days… This means we are way beyond what is required for businesses,” she said.

However, the impact of the Middle East conflict would be reflected on prices.

“We are praying for the best that this conflict in the Middle East will be over soon… but, we are preparing for the worst,” the Energy chief said.

The “worst case scenario,” Garin said if the closure of the Strait of Hormuz would be prolonged.

As far as prices are concerned, the “worst” that the Philippines experienced was during the onset of the Russia-Ukraine war in 2022.

“It must be known that in June 2022, the impact showed higher prices to where we are now. During that time, Dubai crude was at $113.24 per barrel. Today, close to $80 per barrel. Our pump prices that time were around P80. Now we haven’t reached that point yet,” the Energy chief said.

Expect an increase

Garin said that as of Tuesday, March 3, it is still difficult to determine the amount of increase in pump prices to be implemented next week.

“There is still not enough data to make projections… What we are definite is there is increase because of the closure of Strait of Hormuz. Let us expect an increase,” she said.

DOE-Oil Industry Management Bureau Director Rino Abad earlier said that fuel prices could increase by up to P10 per liter in the coming weeks.

“We are instructing all oil companies to submit to us by tomorrow, all the contingency measures they are undertaking [should] the situation escalate,” Garin said.

During the press conference, Abad said the DOE will appeal to fuel firms to stagger the implementation of any pump price hike starting next week.

The DOE-OIMB director added that the agency will also call on fuel companies to continue on giving discounts.

“No less than the President appealed to them [to stagger the price increase],” Garin said.

“In fairness to the oil companies, they agreed before… We’ll just reinforce the same kind of arrangement with them,” Abad said.

Emergency powers

Marcos, at a briefing, said he would talk to congressional leaders to grant him the authority to reduce excise taxes on petroleum products once the price of Dubai crude exceeds $80 per barrel.

“It was mentioned by the President… we leave it to the economic managers how they will decide…We will have to wait for the decision of the economic managers,” Garin said.

“We have to wait for the advice of Congress,” she said

Fuel conservation

The DOE is also calling on the public sector to conserve fuel consumption in light of the uncertainty in petroleum supply caused by the ongoing conflict in the Middle East.

In an advisory released by the DOE Secretary and Inter-Agency Energy Efficiency and Conservation Committee (IAEECC) Chairperson, the DOE listed several fuel efficiency and conservation practices that all government entities shall strictly implement.

These practices include the regular and preventive maintenance of vehicles, adopting a standardized vehicle monitoring system, phasing transition to electric or hybrid vehicles, and more.

The advisory underscored that collective action within the public sector is necessary to achieve the Government Energy Management Program’s goal of reducing fuel consumption by at least 10%.

This is in addition to an earlier directive to DOE bureaus, offices, services and the Energy Family.

Garin emphasized that “the energy family should lead the public by example in practicing energy efficiency whether in fuel or in electricity as directed by the President.”

“We appeal to the public to make energy efficiency a habit,” she said. — BAP, GMA Integrated News