Manila orders oil firms to sell ‘dirtier’ diesel

MANILA: The Energy Department has told oil companies to sell a cheaper, but dirtier type of diesel oil to motorists to fight inflation, backing away from a twoyear-old regulation that banned its use to improve air quality.

The department’s plan would need clearance from the Environment Department, which implemented Manila’s switch to cleaner Euro-IV compliant fuels from Euro-II in January 2016, a rule that covered oil companies and car manufacturers.

The Energy Department was evaluating the plan, said an official.

On Thursday, it directed that Euro-II diesel should be provided as a fuel option for transport and industrial retail customers “for the purpose of reducing the impact of rising petroleum prices in the world market”.

“We’re studying it and giving consideration to the plan to cushion inflation. We’re also looking at the implications for emissions,” said Environment and Natural Resources Undersecretary Jonas Leones yesterday.

Euro-IV fuels have sulphur content of 50 parts per million (ppm) versus 500 ppm for Euro-II fuels.

The country’s top refiner Petron Corp was studying the impact of the plan, said the company’s spokesman.

Pilipinas Shell Petroleum Corp, the local unit of Royal Dutch Shell PLC, was checking into the matter, said a spokesman.

Philippines’ annual inflation climbed to its highest in more than five years at 5.7 per cent last month, prompting the central bank to raise interest rates for a third time this year on Thursday.

Along with the switch back to Euro II-fuels, Energy Secretary Alfonso Cusi ordered the government’s Philippine National Oil Company-Exploration Corp to import “low-priced petroleum products, particularly diesel, to mitigate the impact of volatile oil prices.”