Maharlika Investment Corp. eyes large oil storage facility in PH

The Maharlika Investment Corporation (MIC) is seeking to establish an expanded oil storage facility in the country co-funded by the government and the private sector to shield the country from future oil price surges due to conflicts overseas.

Rafael Consing Jr., MIC president and chief executive officer, made the announcement during the 13-panel Legislative Energy Action and Development Joint Committee led by the House ways and means panel, chaired by Marikina 2nd District Representative Romero "Miro" Quimbo.
 
Consing said the oil storage facility will be built under a consortium model, with the state-run Philippine National Oil Company (PNOC) contributing land or other assets. The MIC and the private investors, meanwhile, will shoulder the financial requirement and the private sector into tank farms, and for the private sector to handle the operation of the oil storage.

"That [consortium model] would expand storage capacity without forcing the MIC itself to take direct market risk on fuel inventory," Consing said in response to the queries of 4K party-list Representative Iris Marie Demesa Montes.

"That is an intermediate term plan. I envision that to be a solution that will come maybe about two to three years from the time we, in fact, start working," Consing added.

As it is, Consing said the price of the landed fuel or the refined fuel imported overseas has gone up by about 60% to 70%.

As such, Consing said retailers have to cash out 60% to 100% more in working capital just to be able to retain the old inventory.  

"That, I think, is what we should look at as a nation. How can we help them? This idea of storage or a strategy regarding storage, I must admit, Ma'am, it is a reaction to the existing situation because we were not thinking, we were not anticipating this event. Now that we already have this and we've studied it… in fact, we are aiming for three levels of solutions," Consing said.

Local pump prices have soared exponentially since fighting between US-Israeli forces and Iran broke out on February 28. The Philippines sources almost all of its crude supply from the Middle East.
 
Access to Strait of Hormuz, a major passageway for oil supply worldwide, has been severely constricted by a blockade of Iranian forces, as well as another blockade of American ships.

As a result, fuel prices have already breached P100 per liter over the last two weeks, burdening sectors across the board, especially the public transport sector. — VDV, GMA News