DOE assures public of enough fuel supply

MANILA, Nov. 10 (PNA) —- Department of Energy Secretary Angelo Reyes on Monday assured the public that there is sufficient supply of fuel in the country enough to last for the next eight to 13 days.

In a meeting with representatives of the oil companies and transport groups, Reyes said there is no reason to panic or be alarmed on the possible shortage of fuel.

“Don’t panic, relax lang kayang-kaya 'to (We can hurdle this),” Reyes said when asked until when the supply will last after oil companies refused to import especially the independent oil players since they complained of incurring losses due to the implementation of price freeze on petroleum products in Luzon under Executive Order 839.

Reyes added the supply that could last in the next eight to 13 days are finished products and does not include the crude that oil firms are kept and being refined.

Zenaida Monzada head of the Oil and Management Bureau of the Department of Energy (OMB-DOE) however admitted that the ideal reserve should be 21 days.

Reyes also declined to comment if he will recommend the lifting of EO 839 in their scheduled cabinet meeting tomorrow in order to resolve the problem.

“I will be attending a Cabinet meeting tomorrow, (but) we don't know if it's going to be decided there. I don't know,” he admitted .

For his part, Edgar Chua, country manager of Pilipinas Shell Petroleum Corp. (PSPC) said in their case they have a two to three month inventory based on their September sales forecast. However, he could not guarantee that they would be able to fill in the demand of the other oil companies.

”So, if there's a sudden surge in demand we cannot cope. So we cannot be expected to cover the shortfall if the others stop importing. We will cover our normal markets. Unfortunately our dealers are in a difficult position. When the customers go to them they cannot say we will only sell to those who are their former customers because then that is being discriminatory. Of course what happens is the loyal customers can sometime suffer like what Ms. Maranan was saying yung suki nila na station has suddenly stopped. That's simply because our dealers cannot discriminate,” Chua said.

He also pointed out that the company is incurring losses now with the implementation of EO 839 which orders oil firms to use the October 15 price level for petroleum products.

“We can state that the losses incurred in retail sites in Luzon are not being recovered in wholesale in Luzon or in wholesale and retail in the Visayas and Mindanao. The prices of the market we sell to are reflective of the costs and are fair and reasonable and are based on competitive forces that are in that market. So there is no cross subsidy being done because we cannot do that because otherwise it will be too expensive and we will already be accused again of discriminating and unfair prices,” Chua said.

Eric Recto, Petron president echoed Shell’s statement saying that “my position is, Petron continues to refine based on a program that was determined about two months ago. And we are able to service an increase in the demand only to a marginal extent -another five or 10 percent more. If the supply situation becomes critical as a result of the none importation of finished products from some of the importers, then Petron from its refinery will not be able to supplement the supply."

While noting that Petron could import in case the demand surge, Recto stressed that “it would be like we would do it at a loss, which we are not ready to commit to.”

“We are not ready to commit to do business in this environment where the losses continue to mount. We are confident that with government we will find a solution that will avoid an inventory supply shortage,” added Recto.

To recall, small oil players said they will not import fuel until the government lifts EO 839 since they've incurred losses in the past weeks.

Consumer and Oil Price Watch Advocate (COPW) Raul T. Concepcion on the other hand appeals for sobriety in particular to Shell who filed last week a temporary restraining order (TRO) asking for the lifting of EO 839.

“It is unfortunate that Shell had to file a Temporary Restraining Order (TRO) with the Makati Regional Trial Court one day after they appealed to the President to lift EO 893 through full-paged ads published in two major newspapers on November 5, 2009”, Concepcion said.

“The oil companies must realize that after 11 years, the DOE-DOJ Task Force is finally stepping up to the plate and exercising its regulatory functions. We express our appreciation and congratulate DOJ Secretary Agnes Devanadera for taking decisive action to strictly enforce the safeguard provisions of the Oil Deregulation Law. This is confirmation that finally, weight has been given to COPW’s long-standing recommendations," Concepcion added.