Energy Secretary Raphael Lotilla thumbed down proposals for strategic petroleum reserve (SPR) or oil stockpile, saying this needed a more thorough study in the wake of the government’s promotion of electric vehicles (EVs).
The Department of Energy has been pushing for the rollout of EVs following the enactment of the Republic Act 11697 or the Electric Vehicle Industry Development Act.
Lotilla said the DOE was looking at 50 percent EV penetration by 2040.
“So, 50 percent of our vehicles will be electric, how much would be the demand for oil-based products?” Lotilla said in a recent briefing.
“We’ll have to take a look at all of these things, but it is a very legitimate question to be asked whether by our legislators or by the public on what do we do with a strategic reserve,” he said.
The former administration of President Rodrigo Duterte earlier proposed an SPR consisting of large stockpiles of crude oil and petroleum products, stored in facilities located around the country—and possibly overseas—that are released during periods of local or international oil supply disruptions.
Lotilla said the US SPR was meant to ensure energy security, specifically to address oil supply constraints.
“Right now, are we experiencing a supply constraint? No, therefore the answer is not a strategic reserve,” he said.
Philippine National Oil Co.’s (PNOC) SPR program was supposed to ensure the long-term stability and security of the oil supply even in times of geopolitical events.
The program aims to provide oil stockpile, either crude oil, finished petroleum products, or both, equivalent to 90 days of the domestic oil requirements.
Lotilla said the SPR should be built when oil prices are low.
“Because you don’t want to buy high and knowing that it’s cyclical, you’re going to lose money. You’re going to lose your shirt if you buy high and expect that you will continuously go up,” he said.
Lotilla said most SPRs store crude oil while the Philippines only has one refinery that accounts y for 30 percent of domestic supply.
“So 70 percent is refined products, not crude oil because refined products are hard to store,” he said.
He said government did not pursue SPR even during the 1973 oil crisis, and “we need to study why our previous generations did not go for that kind of a solution.”