MANILA, Philippines ? The country?s inventory of finished petroleum products has dropped to less than two weeks from the usual three as oil firms that do not refine crude have halted importation of gasoline and diesel due to government-imposed fuel price caps in Luzon.

?Don?t panic. Government will not allow shortages. We don?t even have to talk about contingencies because we?re not in a problem situation yet,? Energy Secretary Angelo T. Reyes Monday assured the public.

Reyes said the country?s inventory of finished petroleum products would run out after 13 days.

?You cannot force private corporations to sell at a loss indefinitely. It is better that people will know. It?s not good to conceal facts from the people,? he said.

In a dialogue with oil firms, transport groups and the energy department, Reyes said the average inventory for the year was usually at least 21 days for finished products?gasoline, diesel and kerosene, liquefied petroleum gas and bunker fuel.

Reyes was referring only to his department?s estimates of the country?s inventory of imported finished petroleum products, and did not take into account the refiners? crude oil inventory, which can later be processed into finished products.

Only Petron Corp. and Pilipinas Shell Petroleum Corp. refine crude oil in the country into gasoline, diesel and other petroleum products.

With the imposition of Executive Order No. 839, some of the smaller oil firms have been forced to either curb or withhold importation to avoid incurring huge losses they cannot absorb, unlike the big oil companies.

EO 839 has frozen fuel prices in Luzon at their Oct. 15 levels due to the devastation wrought by storms in a large swath of the country?s main island. It has been in effect since Oct. 24.

Tightness in supply

Should the executive order remain and oil firms defer importing new stocks over the next two weeks, the country may feel a slight tightness in supply of fuel products, said Zenaida Monsada, director of the oil industry management bureau of the Department of Energy (DOE).

Monsada, however, assured the public that there was still supply and that the DOE was considering a number of options to address certain abnormalities in the market.

?Lifting the EO is only one of the options. Petron Corp. has already submitted a list of possible recommendations or solutions that can help address the situation,? she added.

At the dialogue, oil companies sought anew the lifting of EO 839, saying that this merely resulted in supply disruptions and huge financial losses.

Malou Espina, Total Philippines corporate affairs manager, said Total?s inventory of diesel was good until Nov. 17, while its gasoline supplies may last until the end of the month.

Total said as early as last month that it had stopped importation of fuel products because it could not sell at a loss.

Badly hit

Espina said Total had been badly hit with the implementation of the order since 97 percent of its retail network was in Luzon.

?We seek the immediate lifting of EO 839 because we cannot continue to sell at a loss,? she said.

Liquigaz Philippines president Patrick Libihoul said the imposition of EO 839 was not normal.

?It concerns us that the ground for the EO?s issuance was a national emergency due to the typhoons, and this is a country visited by more than 20 typhoons a year,? Libihoul said.

Pilipinas Shell and Petron said they could not cover the supply shortfall should other companies stop selling due to their non-importation.

?We cannot be expected to cover the shortfall if the others stop importing. We will cover our normal markets,? said Shell country chair Edgar Chua.

Chua said the losses that Shell was incurring in its retail gas stations in Luzon were not being recovered in its wholesale market on the main island or in the wholesale and retail markets in the Visayas and Mindanao.

Petron president Eric O. Recto said the company could only service a 5-10 percent increase in demand. Nevertheless, nothing was preventing Petron from importing finished petroleum products, he said.

Chua also pointed out that the EO poses a bigger problem over the long term because the country was seen as a place where there was no stability, no rule of law and no government protection given to investors.

He said Shell filed a petition with a court for the lifting of EO 839 because it didn?t want the order to ?become a precedent that every time there is a national emergency,? such a directive will be issued.

Consumer and Oil Price Watch chair Raul T. Concepcion suggested a one-week moratorium on any action legal or otherwise that would preempt whatever recommendation the Department of Energy-Department of Justice Task Force would make.

?The oil companies must realize that after 11 years, the DOE-DOJ Task Force is finally stepping up to the plate and exercising its regulatory functions,? Concepcion said.

Temporary closure

The First National Petroleum Retailers Association, which represents the dealers of the three major oil companies, joined oil firms in asking for the immediate lifting of the prize freeze.

?As of this writing, in fact, stock outs have already resulted in the temporary closure of some of our gas stations. Eventually, more dealers will be forced to reduce operating hours, and lay off workers, who themselves are victims of the recent calamities,? it said.

Should EO 839 be lifted, Fernando Martinez, president of Eastern Petroleum Philippines, said the firm may have to raise prices by P4 to P5 a liter, in two or three installments.