DOE seeks PNOC-EC compliance to fuel standards
By Myrna M. Velasco – July 17, 2018, 10:00 PM
from Manila Bulletin
Before giving its go-signal to the planned P2.0 billion worth of oil importation, the Department of Energy (DOE) would strictly require state-run Philippine National Oil Company-Exploration Corporation (PNOC-EC) to comply with the fuel standards as well as the whole logistics chain needed for the diesel products distribution to public utility vehicles (PUVs), primarily jeepneys.
That will be aside from the rigorous condition of the government that the fuel source shall be able to sell cheaper than what it is in the Philippine market today – after factoring in taxes and logistics costs.
“That is why it is critical that the choice of source of fuel (supplier) should be able to provide a competitive price that meets Philippine standards and for PNOC-EC to have full appreciation of the complete value chain,” DOE Assistant Secretary Leonido J. Pulido III has noted.
He added that logistics – to include terminal as well as the distribution networks up to the consumers – shall be comprehensively covered in the oil importation plan of PNOC-EC.
“On the supply value chain, PNOC-EC will negotiate contracts for the bulk supply, storage, blending facility, transport and retail distribution,” Pulido said.
As far as the required biofuels blend in Philippine fuels is concerned, the energy official noted that PNOC-EC shall also strictly conform to that.
The excise taxes under the Tax Reform for Acceleration and Inclusion (TRAIN) Act as well as the value added tax (VAT) components in pump prices shall likewise be seriously taken into consideration when it comes to assessing the final price pass-on of the PNOC-EC fuel imports.
“On taxes and logistics cost, PNOC-EC will pay them as the private oil companies,” the energy official stressed.
The state-run firm signified this week that it will be spending P2.0 billion for the targeted oil imports – chiefly diesel products – that will either be sourced from Russia or other global oil producers/sellers.
The targeted volume will be for 60 million liters and initial shipment is eyed on board by next month (August). The expected pump price they will be selling the products on would be at P35 per liter equivalent.
On the re-alignment of funds for the importation, the energy department explained that for PNOC-EC being just a subsidiary firm – its parent being Philippine National Oil Company, it “does not require Congressional approval to use its reserve funds.”
It has been the wish of Energy Secretary Alfonso G. Cusi that the PUVs shall be served by the oil imports of PNOC-EC; and it is aimed to be at least cheaper than what private oil players offer in the market at present.
