Fuel deliveries to shield off-grid communities from price shock

Remote islands dependent on diesel-fired power plants are getting a fuel lifeline as state-run National Power Corp. (Napocor) begins diesel deliveries under a government supply deal to insulate missionary areas from the latest oil price shock.

The agency said Tuesday it started lifting diesel fuel from Philippine National Oil Company-Exploration Corp. (PNOC-EC) under their agency-to-agency fuel supply agreement, bolstering fuel inventories needed to keep its Small Power Utilities Group (SPUG) plants operating despite rising fuel costs triggered by the Middle East conflict.

“NAPOCOR alone cannot fulfill the task of ensuring sustained power generation in missionary areas, especially in view of the upward movements in fuel cost caused by the Middle East conflict.

With PNOC’s support, we are able to keep our diesel power plants (DPPs) running, remote and isolated homes illuminated, and off-grid communities still bustling with activities that drive local socio-economic development,” Napocor President and Chief Executive Officer Jericho Jonas Nograles said.

The first deliveries included 40 kiloliters of diesel for the Patnanungan Diesel Power Plant in Quezon Province, 80 kiloliters for the Sibuyan Diesel Power Plant in Romblon, and 800 kiloliters for SPUG power plants in Batanes.

The diesel for the Patnanungan and Sibuyan plants was sourced from the SEAOIL terminal in Mabini, Batangas, while the Batanes shipment came from the Philippine Coastal Storage Facility in Subic, Zambales.

Napocor said the fuel supply arrangement forms part of its efforts to strengthen fuel security after the recent Middle East crisis sent global oil prices higher, increasing the cost of operating diesel-fired power plants that provide electricity to remote communities beyond the country's main transmission grid.