Oil firms summoned on Euro-2 downgrade

Energy Secretary Alfonso G. Cusi summoned oil companies today, August 20, to apprise them on the implementation parameters for the country’s downgrade to dirtier Euro-2 diesel fuel standards.

In an advisory sent to the oil firms, the Department of Energy (DOE) stated that they are required to attend “urgent meeting with Secretary Cusi on Monday.”

The department added that the energy chief “will personally attend and preside the meeting on Euro-2 implementation.”

The DOE is not about to pull the plug on proposed reversion to the dirtier Euro-2 fuel quality; especially with last week’s report that diesel shipment from Russia already arrived at the Subic port.

Media queries on the matter had not yielded confirmation or denial from the energy department.

Oil firms are almost in chorus in sounding off that this policy will stir “logistical nightmare” in the industry’s value chain – amid stark realities that the estimated cost reduction would be very negligible at just 10.28 to 10.30 per liter.

The DOE, nevertheless, is bent on re-embracing the lower fuel quality with 500 parts per million (ppm) sulfur content that may adversely impact on people’s health and the environment – that is compared to the cleaner Euro-4 with just 50 ppm content.

In particular, the Independent Philippine Petroleum Companies Association (IPPCA) branded the Euro-2 diesel mandate as “a misguided policy and done without due consultation,” hence, they are calling that the plan be ditched.

IPPCA primarily stressed that the DOE Circular mandating the sale of Euro-2 diesel “caught the local players by surprise and we find this directive to be ill-advised and therefore must be recalled.”

And instead of downgrading fuel quality to the dirtier Euro-2 standard to tame inflationary pressure on basic commodities, the industry’s independent players are batting for suspension of the Biofuels Law or the measure mandating biofuel blends to fuel products.

While the DOE had calculated price reduction of 10.28 to 10.30 per liter on Euro-2 fuel sale, temporarily scrapping the biofuels policy, according to IPPCA, can yield heftier savings to Filipino consumers by up to 12.00 per liter.