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Friday, June 14, 2024

Pacquiao hits failure to create oil buffer stock

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PROMDI presidential aspirant Sen. Manny Pacquiao said the looming fuel crisis could have been averted if the Department of Energy had the foresight to stabilize fuel prices by creating buffer stocks for gasoline and diesel.

According to Pacquiao, the Philippine National Oil Corporation, which is under the DoE, should have a regular stockpile of fuel that can be used as a reserve when there is a marked increase in fuel prices in the global market.

Under the amended charter of the PNOC as provided under Presidential Decree 927, it is mandated “to provide and maintain an adequate and stable supply of oil and petroleum products for the domestic requirement and for that purpose to engage in, control, supervise and regulate the transportation, storage, importation, exportation, refining, supply, sale, and distribution of crude oil, refined petroleum and petroleum-based products, whether imported or produced by local refineries.”

In its 2020 annual report, the PNOC sought for the establishment of the Strategic Petroleum Reserves (SPR) which envisions to create “large stockpiles of crude oil and/or petroleum products, stored in facilities located around the country (and possibly overseas) that are released during periods of local or international oil supply disruptions.”

“The National SPR Program is considered to be an extensive undertaking aimed to provide an oil stockpile, either crude oil, finished petroleum products, or both, equivalent to 90 days or more of the country’s domestic oil requirements,” the 2020 Annual Report said.

The project, however, did not materialize, allegedly due to the COVID-19 pandemic, and was again listed as one of its projects in its 2022 “Plans and Projects.”

According to Pacquiao, the PNOC should have exercised its mandate to create fuel reserves as soon as the government started easing up restrictions on transportation and businesses have started to normalize.

Pacquiao added that apart from the providing buffer stocks through the PNOC, the government should also revive the subsidy mechanism for oil and fuel consumers, called the oil price stabilization fund, which was abolished with the enactment of the Oil Deregulation Law.

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