Gov’t dodges stockpiling, shifts tack to ‘oil trading’

The Department of Energy (DOE), has dodged the “stockpiling strategy” and has instead shifted to “oil trading mechanism,” of which State-sanctioned imported oil shall be sold to the independent players of the industry.

Energy Secretary Alfonso G. Cusi clarified to reporters that their concept of “strategic petroleum reserve” (SPR) revolves around government’s plan to source oil, mainly from oil producers that are political allies of the Philippines, so they can stock up for the finished product requirements of the country.

Stockpiling, as resorted to by other countries such as the United States and Japan, is a ‘more comprehensive strategy of storing crude or finished products” and can only be touched by government at certain trigger points on either price or socio-political conditions – and their setting up is also often sanctioned by law.

The target importation this year, Cusi said, is up to 3-4 shipments of 50,000 barrels each or a high of 200,000 barrels. Cusi added that initial discussions with independent oil players had already been held for them to purchase governmentimported oil.

“PNOC-EC will not do retail in the beginning, we’ll sell to third party players. Because on the assurance of supply, even if you have hurdles in importing and prices are high, we need to supply the independent players,” he expounded. State-run Philippine National Oil Company-Exploration Corporation (PNOC-EC) has been the entity tasked to pursue the oil importation venture.

Cusi reiterated there is “no guarantee” that the price will be cheaper, and Russia is not the only oil-producing country that they will be exploring to buy from, with him stressing that “it will be Russia and others” depending on which oil-producing country could extend a better deal.

The goal, according to the energy chief, “is security of supply, more than price” – albeit he qualified, that their hope is to get it lower “if we will do negotiations…so if we can get the oil cheaper, we can pass that on to the consumers.”