DOE: PH lacks sufficient oil storage capacity

The Philippines cannot simply keep buying large volumes of oil to build up reserves due to limited storage capacity, the Department of Energy (DOE) said Wednesday.

In Chino Gaston’s report on "24 Oras," the DOE noted that it remains uncertain whether the recent decline in global crude oil prices—driven by a two-week ceasefire between the United States and Iran—will translate into lower local fuel prices.

Energy Secretary Sharon Garin told lawmakers during a hearing that it is still difficult to determine whether the situation in the Middle East has stabilized, given that several oil production facilities have been damaged.

“Whenever there’s an oil infrastructure destroyed in whatever country, prices spike and then go down, and then suddenly something else happens," Garin said.

"We don’t have visibility on where this will go, and unfortunately, we are highly dependent on what’s happening there. It could happen depending on what the two countries do,” she added.

Garin noted that about 20% of the world’s oil supply comes from the Middle East, adding that price spikes—including the possibility of crude oil reaching P200 per liter—cannot be ruled out.

“If the war stops today, will the 20% be able to deliver? I think it will take months because much of the infrastructure has been damaged. LNG (liquefied nitrogen gas) facilities, in particular, may take years to restore,” she added.

According to Garin, the country’s fuel inventory currently lasts for about 50 days. This will supposedly be supplemented by one million barrels of diesel scheduled to arrive this April.

However, she emphasized that increasing reserves is constrained by storage limitations.

“The government planned to purchase up to two million barrels—equivalent to about 10 days of supply—but we’ve only procured one million so far because we don’t have enough storage. We are only good for about 60 days in total—57.8 days for gasoline and 47.26 days for diesel,” Garin said.

Since the Oil Deregulation Law was enacted in 1998, the Philippines has relied on private oil companies for supply and storage.

Garin said this highlights the need to revisit the law to strengthen the government’s ability to respond during crises.

“When there is war and prices spike, it becomes unpredictable. Prices are affected not just by supply but also by other factors. When this happens, we become very vulnerable because changes are immediately reflected locally," she said.

"The DOE can monitor and recommend, but it does not have the power to control prices beforehand,” Garin said.—Vince Angelo Ferreras/MCG, GMA News