THE Department of Energy (DOE) will continue to unload excess liquefied petroleum gas (LPG) supply and boost diesel inventories.
‘So, we’re starting to unload as well, so that storage costs don’t become excessive,’ said DOE Secretary Sharon Garin.
The country’s fuel inventory as of August 21 stood at 47 days. Of which, gasoline supply will last for 44 days; diesel, 47; kerosene, 121; jet fuel, 75; fuel oil, 54; and LPG, 34.
‘We have to do the math because we don’t want to spend too much. Because while we have it, we have to pay for storage-meaning the rent of the space to store it. Therefore, the longer we keep it, the more expensive the storage becomes,’ said Garin, referring to LPG supply. ‘Most of the time, we try to sell it lower than the going rate just to dispose. But I think it’s almost finished because everyone wants it,’ said Garin.
In the past months, the Philippine National Oil Company (PNOC) released a strategic Liquefied Petroleum Gas (LPG) inventory stored at the South Pacific Inc. (SPI) terminal in Batangas, priced at P68.72 per kilogram (kg).
The strategic LPG inventory is an emergency fuel buffer meant to safeguard domestic supply and protect consumers from global market volatility and supply disruptions.
The energy chief said PNOC has no immediate plans to import another batch of LPG supply soon.
‘We have really enough and they already know where to go. Where did they buy from before? In the Middle East. Now, they’re buying from America. So, luckily, our companies have learned to be resilient and to spread their risk.
So, we have many other countries as sources,’ she said.
Likewise, LPG is likely not to be included in the planned strategic petroleum reserve. ‘We still have to study that because there is a different storage for LPG. When you store diesel, gas, it’s just like you put it in a big tank and then you store it there.
‘Here, there are two components that you have to mix. And then there’s the pressure that you have to control and the temperature. So it’s a more complicated process. That’s why we have not included that yet. And also because we have enough,’ she explained.
The PNOC and the Maharlika Investment Corp., are developing a strategic petroleum reserve and oil storage facility. Maharlika proposed a consortium with PNOC and the private sector to build oil depots to store strategic reserves. Maharlika will act as a capital provider, and PNOC will contribute assets; private operators will manage the facilities.
PNOC has funded and started studies to build at least one oil storage tank by end of next year. The investment is initially pegged at P5 billion per storage tank, capable of storing 500,000 to 1 million barrels of oil.
The Senate and House of Representatives are already tackling the proposed bills related to establishing the Philippine Strategic Petroleum Reserve (PSPR) system.
‘We’re still holding on to the diesel because it is being used for transportation. For LPG, you have a substitute. You can burn wood or charcoal. But for diesel, we’re not so confident yet of the situation of the Strait of Hormuz and 60 percent of diesel is really being utilized for transportation. So, maybe it’s not enough at the moment,’ said Garin.