DoE chief junks stockpiling fuel
Unfortunately, our geology in onshore areas is not designed for that. So if we have to build storage facilities, can you imagine the amounts we will be investing?
Daily TribuneUnfortunately, our geology in onshore areas is not designed for that. So if we have to build storage facilities, can you imagine the amounts we will be investing?
The Department of Energy has shot down a proposal to build a strategic petroleum reserve as a buffer to rising fuel prices.
In a recent interview, Energy Secretary Raphael Perpetuo Lotilla explained that a petroleum depot aims to address supply constraints and not cut prices, which is what the country needs more.
"Its purpose is to address supply constraints because when they release (supply) from their strategic reserve, it is at market price. It is not a price adjustment mechanism. It is to ensure energy security. Right now are we experiencing a supply constraint? No, therefore the answer is not a strategic reserve," Lotilla contended.
Lotilla also noted that petroleum depots usually store crude oil. Yet, only 30 percent of local needs are crude oil, with the remaining 70 percent, or the majority, being refined products.
"Unfortunately, our geology in onshore areas is not designed for that. So if we have to build storage facilities, can you imagine the amounts we will be investing?" Lotilla said.
"You see, we will have to take a look at all of these things. but it is a very legitimate question to be asked whether by our legislators or by the public on what we do with a strategic reserve," the Energy chief added.
Credible solution
His predecessor, former Energy Secretary Alfonso Cusi, repeatedly conveyed that implementing a petroleum reserve plan, with Batangas and Bataan as initial site locations, would help address problems with fuel supply and prices.
He said the government's short-term plan was to lease spare tanks from oil importers for additional reserves and contract an oil company for buffer stocking.
Since the government does not have enough storage facilities, the DoE will partner with the private sector to access their facilities across the country.
On the other hand, the government would require the state-run Philippine National Oil Company to build its storage tank for the long-term plan.
