MANILA, Philipines?The government?s decision to directly import oil to meet any contingency and to put pressure on oil companies to lower their prices is a ?bold? move, according to Samar Representative Ben Evardone.
?This will send a signal to the oil cartel that the government will not allow them to further exploit the oil crisis in the Middle East to jack up their prices without letup,? Evardone said.
He was referring to President Aquino?s recent announcement about the government?s decision to stockpile fuel to build up a strategic oil reserve for use in times of ?extraordinary need? through the Philippine National Oil Company-Exploration Corp. (PNOC-EC), the oil and coal arm of state-run PNOC.
Aquino said PNOC-EC will build up a strategic diesel reserve not just to ensure the country?s energy security but also to help provide competitively priced fuel for the local market.
He said the company?s first shipment of 50 million liters of diesel was due to arrive by May, to be stored in two tank farms to be leased by PNOC-EC.
Evardone said the continuing turmoil in the Middle East and North Africa has exposed the country?s vulnerability to the volatile world oil market and possible disruptions in supply.
?I think the happy days of oil companies are numbered. This move of the government will bring relief to consumers who have been hardest hit by the spiraling cost of fuel, he said.
LPG marketers? proposal
In a related development, Rep. Arnel Ty of the party-list group LPG Marketers? Association (LPGMA) has asked Malacañang to certify as urgent a bill seeking to establish a permanent Strategic Petroleum Reserve (SPR) that would provide a ready supply of fuel products during a crisis.
?There is really a need for us to create a state-controlled emergency stockpile of refined petroleum products, to secure our requirements?estimated at the equivalent of 300,000 barrels of oil per day,? said Ty, a member of the House energy committee.
Ty, author of House Bill 4526, lauded President Aquino for moving fast to secure the country?s fuel requirements and said there was a need to put up a permanent SPR, to be maintained by the PNOC.
Worries that the country could face a shortage of finished petroleum products recently prompted the Philippine government to obtain assurances from its neighbor, Indonesia, of extra supplies should the need arise in the future.
?The creation of the SPR will also give flesh to the country?s commitment under the Association of Southeast Asian Nations Petroleum Security Agreement, which encourages members to build extra stockpiles and forge emergency oil-sharing agreements,? Ty said.
At present, the country?s oil industry players have a product inventory of up to 45 days, he added.
Other lawmakers, on the other hand, have criticized the Aquino administration for making windfall profits from the oil price increases.
Cap on VAT backed
Cagayan de Oro Rep. Rufus Rodriguez earlier said that putting a cap on the value-added tax (VAT) could help reduce the price of gasoline. He also said the government?s fuel subsidy was ?too insignificant to make an impact on fuel costs and unfair to other users of fuel who would not benefit from the government?s subsidies.?
Rodriguez said the tax cap would be a compromise to the standoff between the groups that want a suspension of the VAT on fuel and Malacañang, which has rejected it because of its impact on government revenues.
?By collecting taxes on fuel imports up to $80 per barrel, the government would still meet its revenue goals, while consumers would save $46 per barrel,? Rodriguez pointed out.
But Malacañang had said it was worried that a drop in tax collections from oil would create bigger problems for the country.