Energy department moves to limit oil price adjustments

THE GOVERNMENT has moved to limit fuel price adjustments as it aims to soften the impact of elevated costs on consumers who have questioned the pace of price rollbacks, Energy Secretary Sharon S. Garin said on Monday.

At a press briefing, Ms. Garin said oil retailers should adjust prices in line with the range provided by the Department of Energy (DoE) every week amid the state of national energy emergency.

She noted President Ferdinand R. Marcos, Jr.’s declaration of a state of national energy emergency under the Executive Order (EO) No. 110 triggered the government’s power to prescribe the price of fuel products.

“The DoE, with the issuance of the EO 110 by the President, has more control over the industry. But we are not taking over any industry, any business, or taking over any operations. What we are more focused on is the price,” Ms. Garin said.

“It’s a control on the (fuel price) adjustments more than the price itself,” she added.

Mr. Marcos earlier announced a rollback in pump prices for this week, noting that diesel prices will go down by P24.94 per liter, gasoline by P3.41 per liter and kerosene by P2.

Several fuel retailers such as Shell Pilipinas Corp., Seaoil and Flying V have already announced price adjustments in line with Mr. Marcos’ announcement.

Ms. Garin said consumers have been questioning why fuel retailers were slow to roll back prices, even as global prices have dropped.

“The people’s clamor was like, ‘Why are the increases faster than the rollback?’ So, we decided to closely monitor these adjustments,” she said.

Rino E. Abad, director of DoE Oil Industry Management Bureau, said that oil companies that do not follow the fuel price adjustments could face penalties of three months to one-year imprisonment and fines ranging from P50,000 to P300,000.

Brigitte Carmel C. Lim, Top Line Business Development Corp. senior vice-president and chief operating officer, said the company does not expect any immediate disruption to operations.

“We’ll continue to monitor developments and align with DoE guidance as implementation becomes clearer,” Ms. Lim told BusinessWorld.

Meanwhile, Ms. Garin said the country’s fuel inventory can sustain demand for approximately 52.02 days as of April 17, increasing from 50.31 days last week.

“Our stocks are steady because there is steady delivery of the fuel, all sorts of fuel… (There has) been a significant drop in the consumption of fuel in the whole country,” she said.

The average inventory for gasoline is 54.47 days, while diesel has an average inventory of 50.13 days. Kerosene has an average inventory of 129.93 days; 60.69 days for jet fuel; 78.87 days for fuel oil; and 40.2 days for liquefied petroleum gas (LPG).

To boost the oil buffer stock, the Philippine government, through the state-run Philippine National Oil Co., is expecting the arrival of 320,000 barrels of diesel on April 21, which will be offloaded at the Subic terminal, according to Energy Undersecretary Alesandro O. Sales.

Another shipment carrying 330,000 barrels will arrive on April 24, but the oil will be sent to Davao, he said.

Around 21,000 metric tons of LPG are set to arrive in the Philippines next month after the government initiated an order from the US that will pass through Singapore.

In separate advisories on Monday, Petron Corp. and Solane announced a decrease of P3.36 per kilogram in LPG prices following the President’s order to temporarily suspend excise tax.

Meanwhile, Ms. Garin said the DoE is studying the recommendation to lift the moratorium on building new coal plants amid the oil crisis.

In 2020, the DoE issued a moratorium on the development of new coal-fired power plants but some proponents can still apply for non-coverage. Last year, the department issued more exceptions, such as allowing the increase in capacity of coal-fired power plants amid a power crisis.

“We are studying the expansion of that exception, but we need to study it properly because the problem is diesel and diesel is not really a major factor in terms of power generation in the Philippines,” Ms. Garin said.

At present, coal accounts for around 60% of the country’s power generation mix. The Philippines is trying to lessen its dependence on oil amid an energy transition. — Sheldeen Joy Talavera