Discussions revolved around the strict implementation of the Minimum Inventory Requirement.

Department of Energy Secretary Alfonso Cusi wants the nation prepared for fuel supply disruptions.

The Department of Energy (DoE) has proposed to the interim Oil Contingency Task Force (OCTF) the strict implementation of the 30-day reserves and the possibility of staggering price increases to mitigate the impact of a prolonged conflict in the Middle East.

The OCTF is being formalized to prepare the country against a fuel price shock and will be made permanent through an Executive Order that the Palace is readying.

The DoE called on oil industry players to suggest measures to ease the effects on the economy of a spike in oil prices.

Discussions in the interim group revolved around the strict implementation of the Minimum Inventory Requirement (MIR), which is equivalent to a stock of 30 days for oil refiners, 15 days for bulk marketers and seven days for liquefied petroleum gas players.

A proposal to increase the MIR to 60 days was also raised, but oil firms representatives stated that the immediate creation of additional infrastructure along with the added logistical demand may prove costly and detrimental to the operations of refiners and distributors.

As for oil prices, the DoE explored the possibility of apportioning oil price increases over a period. The oil players took note of the proposal and shared that, based on indicative figures, current pump prices remain lower than 2018 figures, even taking into account the effects of the 2019 tranche of the Tax Reform for Acceleration and Inclusion or TRAIN Law.

“The DoE is working 24/7 to address these oil-related concerns brought about by the attacks in one of our biggest oil sources in the Middle East. We are reminding everyone to practice energy efficiency measures like carpooling and the use of public transport so that we may all contribute to help the nation and the environment” DoE Secretary Alfonso Cusi said.

“We realize the importance of addressing issues beforehand, so that the government may have contingency measures to sustain the country’s economic growth and provide basic services to the people. The activation of the OCTF is vital to our resiliency because we are currently dependent on oil imports,” Cusi stressed.

Inputs during the meeting will be incorporated in the proposed EO to activate and make permanent the OCTF.

Key officials and representatives from the Philippine Competition Commission, National Security Council, Departments of National Defense, Trade and Industry, Interior and Local Government, National Defense, Trade and Industry, Foreign Affairs and Justice were present during the meeting.

Other measures proposed included alternatives to oil supply and a possible increase in the biofuel blends to head off a shortage.

The meeting with the oil industry players was presided by DoE Undersecretary Donato Marcos and co-chaired by Oil Industry Management Bureau assistant director Rodela Romero.

Representatives from the Office of Senator Win Gatchalian, Philippine Institute of Petroleum and other members of the energy sector were present in the meeting.

The contingency strategies were called for in view of last week’s drone attacks on Saudi Arabia’s state-run Aramco oil processing facilities in Abqaiq and Khurais.

The OCTF was activated in preparation for natural or manmade disasters to address the country’s immediate oil supply concerns and, in this case, the impact of the geopolitical and disaster-related events that may cause supply disruptions or sharp volatility in the world oil prices.

The government is monitoring oil supply from the Middle East. Finance Undersecretary Karl Chua said the government is relying on Saudi Arabia’s promise that oil supply will be back to normal by the end of the month.

“So, if that is the case, then it will have no impact on our oil supply and there is no further action needed,” Chua said.

“We just have to monitor that the supplies that are coming from the Middle East are indeed adequate,” he added.

Albay Rep. Joey Salceda, chairman of the House of Representatives Committee on Ways and Means, warned oil companies against taking advantage of the attack in Saudi Arabia to increase prices.