DOE backtracks on plan for mandatory sale of Euro-2 diesel

In a sit-down consultation with the downstream oil industry players this week, the Department of Energy (DOE) has backtracked on its earlier hardline stance mandating oil companies to sell Euro-2 diesel at their retail networks.

If the oil firms would opt not to provide Euro-2 option at their stations, the DOE’s proposal will be for them to offer additional discount of 10.30 per liter on a number of stations they are supposed to nominate for the lower quality diesel sale.

Energy Secretary Alfonso G. Cusi himself has presided the meeting with the oil companies; and he also indicated to them that the Russian diesel importation of state-run subsidiary Philippine National Oil Company-Exploration Corporation (PNOC-EC) shall be treated as “strategic reserve” – although such concept for the industry still rests on blurry line.

As of press time, no commitments have been submitted to the government yet on the propounded Euro-2 lanes or the additional discounts being sought. So far, according to the oil companies, the meeting with the Secretary ended with most of them wanting to just extend additional discounts rather than downgrade their diesel sale at the pumps to Euro-2.

On the implementation of the Euro-2 option, the oil companies are mandated “to submit their respective implementation programs by August 24, 2018,” to the DOE’s Oil Industry Management Bureau.

In the propounded implementation plans, the DOE prescribed that the oil firms must “indicate the participating retail outlets, the date of intended implementation and other related information for the provision of an additional diesel fuel alternative.”

Cusi said the fuel quality downgrade is in line with the State’s move in “finding ways to help control inflation,” a serious economic dilemma caused by the government’s tax reform program.