Camarines Sur Representative LRay Villafuerte has said the global oil price spiral triggered by the Ukraine-Russia conflict should rouse the Department of Energy (DOE) to “put its money where its mouth is” and finally set the national strategic petroleum reserve (SPR) plan in motion instead of just endlessly talking about it.
With oil prices now breaching the level of $110 a barrel in the world market—and possibly hitting the $120-threshold in the days ahead—“all that our energy officials have managed to say at this critical point is that the PNOC (Philippine National Oil Company) has been tapped to conduct a feasibility study on this petroleum reserve structure,” said Villafuerte, who has been prodding the DOE for almost two years now to establish this national SPR.
“Our energy officials should start working triple time on the long-planned establishment of a national fuel reserve, more so now when the full-blown Russia-Ukraine conflict has raised fears that the global cost of oil could go up to as high as $120 per barrel in the days or weeks ahead.”
“For nearly two years now, our energy officials have been talking the talk about a national strategic reserve for petroleum products, but they have not yet to walk the walk,” Villafuerte said. “In fact, the best that DOE Secretary (Alfonso) Cusi can assure a worried public is to tell them that the PNOC has been tapped to do a feasibility study on it.”
“My only question is: Why are our energy officials seemingly taking their own sweet time to put flesh into this SPR? They should start putting their money where their collective mouth is—rather than just emitting hot air with this blabbering (about studying a national fuel reserve plan) that only contributes to global warming,” he said.
Villafuerte said that much to his chagrin, the best that Cusi could say at a virtual news forum this week was that the DOE had tapped the PNOC to conduct a feasibility study on this SPR plan, and was quoted as telling the media that: “Patapos na kami sa paga-aral na ‘yan. Kailangan natin magkaroon ng strategic storage kung saan natin ilalagay ang supply, and then magkakaroon po tayo ng system how are we going to dispose these.”
The Bicolano legislator said what made Cusi’s remarks doubly exasperating was that he already knows what the SPR could do and how the Ukraine-Russia crisis could impact international and domestic fuel prices, and yet “he and his subordinates appear shorn of any sense of urgency on this critical matter. We could probably be helpless in dealing with this oil imbroglio because nothing has been done by our energy officials, save for spending almost two years preparing to study the planned oil reserve facility.”
He said Cusi himself has said at the media forum that a state-run storage facility would enable the government to bring in additional inventory that could “help arrest the price,” and that the already rising pump prices of petroleum products would take a greater hit in the event that the Russia-Ukraine war escalates.
“Okay, our energy officials are aware of the situation and how things could even turn for the worse, but how could we expect the SPR to be up and running soon enough to address this problem when it is still in the study stage?” Villafuerte stressed.
Villafuerte earlier expressed disgust over the DOE officials’ “utter lack of a sense of urgency in doing nothing except to prepare to do a study on the SPR that the DOE has been talking about for almost two years now. Look, they are not even studying it; they are still in the preparatory stage on how to go about conducting such a study. I am afraid it is taking the DOE so long to consider the SPR, let alone set it up, to the point that the Philippines might have switched to e-vehicles or hybrid cars already by the time a strategic petroleum reserve is up and running in the country.”
Last June 2021, Villafuerte reiterated his call for the establishment of the SPR after observing that the vaccine-driven economic recovery in the United States (US) and Europe had started to ease travel restrictions and increase demand anew for fuel.
“Our energy officials should start working triple time on the long-planned establishment of a national fuel reserve, more so now when the full-blown Russia-Ukraine conflict has raised fears that the global cost of oil could go up to as high as $120 per barrel in the days or weeks ahead,” Villafuerte said.
Although there isn’t enough time to put up such an SPR to address the current petroleum price surge, Villafuerte said “energy officials must drop their lackadaisical approach and put this strategic petroleum reserve plan in motion in preparation for future conflicts, supply hitches or any other geopolitical developments or catastrophes that could drive fuel prices to later go up north anew beyond the reach of ordinary Filipinos.”
“What kind of catastrophe are our energy officials waiting for to happen before they finally come to their senses and put this SPR plan on the fast track?” stressed Villafuerte.
The per-barrel price of crude oil surpassed the $110 level last March 2, with Brent Crude Futures climbing to as high as $111.78 and West Texas Intermediate (WTI) reaching a peak of $110.1—the highest levels since the 2013-2014 period.
According to the DOE, the year-to-date fuel prices as of this week totalled a net cumulative increase of P11.65 per liter of diesel, P9.65 per liter of gasoline and P10.30 per liter of kerosene.
The average pump prices of petroleum products in Metro Manila as of last week was P66.35 for a liter of gasoline, P59.27 for diesel and P60.69 for kerosene.
Once the cost of crude reaches $120 a barrel, Cusi said, “We will be seeing the price of gasoline hitting above P70 (per liter) and diesel hitting above P60 per liter.”
The DOE has estimated diesel and gasoline prices to go up to P68.70 and P78.33 per liter, respectively, if Dubai crude rises to $120 a barrel.
A week before Cusi’s remarks, the DOE’s Oil Industry Management Bureau (OIMB) director Rodela Romero told a “Laging Handa” public briefing at the Palace that the DOE seeks to find out in a proposed study the project cost to establish the SPR, along with its ideal capacity, withdrawal schedule and priority sectors to be served.
According to Romero, the DOE is reviewing a new terms of reference (TOR) for a rebidding for the procurement of a consultancy service that will conduct the study.
“The DOE must do a lot more—and do it much faster—than just to plan a study on the SPR. Had this department accelerated its plan to establish an oil reserve, we probably wouldn’t be having the kind of supply and pricing problems now that have jacked up fuel prices for nine consecutive weeks in a row in barely two months,” Villafuerte said.
Last June 2021, Villafuerte reiterated his call for the establishment of the SPR after observing that the vaccine-driven economic recovery in the United States (US) and Europe had started to ease travel restrictions and increase demand anew for fuel.
