Four small oil firms to sell ethanol-blended gasoline

The government’s efforts to accelerate the use of cheaper, environment-friendly transport fuels is getting a major boost with four new players in the downstream oil business agreeing to sell ethanol-blended gasoline in at least 400 service stations nationwide by September this year.

Energy Undersecretary Peter Anthony Abaya said that Seaoil, Unioil, Flying V and USA 888 will be putting up additional pumps to jumpstart the Department of Energy’s National Fuel Ethanol Project aimed at reducing the country’s dependence on expensive imported oil

"An even better news is that the oil companies, instead of blending a minimum five percent ethanol to gasoline, will be actually using a higher 10-percent blend. The companies will be initially importing 25 million liters of ethanol for this purpose but eventually, when the ethanol bill is passed and the infrastructures are in place, oil companies will be getting ethanol supply from local producers," said Abaya.

To encourage investors to pour money into the establishment of ethanol production facilities, Malacañang recently issued an executive order that reduced the tariff on ethanol to one percent from 10 percent.

Abaya expressed optimism that with the initiative taken by the four oil companies, the bigger players like Petron Corp., Pilipinas Shell Petroleum Corp. and Caltex Philippines Inc. will follow suit.

Ethanol is an alternative energy resource produced from crops such as corn, grain sorghum, wheat, sugar and other agricultural feedstocks. It can be used as a transportation fuel, as a blend to gasoline, a component of reformulated gasoline, or a primary fuel with gasoline as blend.

The use of ethanol should also bolster the local sugar industry.

"The use of ethanol as an additive to gasoline will be good for the sugar industry. It will encourage sugar planters that shifted before to planting other crops such as corn to go back to sugar production. This policy assures the industry of a stable market and will keep farmgate prices of sugar stable," said Sugar Regulatory Administrator James Ledesma Jr.

Ledesma added that ethanol for fuel can be produced at a cost of P24 to P28 per liter, making it even cheaper than current prices of gasoline and even diesel. Moreover, vehicle owners will benefit from the increased engine efficiency with the use of ethanol blend as well as a 25 percent improved mileage.

Under the government’s National Fuel Ethanol Program, private entities are encouraged to invest in the production of biofuels and distribution of bio-fuel blends.

The government’s ethanol program aims to intensify the use of bio- fuels in the transport sector by blending a minimum of five percent bioethanol fuel into all gasoline-fed motor vehicles.

Government wants to raise the percentage of bioethanol blend to 10 percent by 2010

The Philippines needs about 400 million liters of ethanol by 2010 thus requiring about 20 ethanol plants all over the country by that time.

The group of British firm Bronzeoak Phils. and Bukidnon Sugar Milling Corp. (BUSCO) are putting up a fuel fuel ethanol plant in Bukidnon province in the next three years.

Bukidnon Representative Miguel Zubiri said the two groups are presently conducting feasibility studies for the possibility of establishing ethanol plants in Bukinon. A plant with a 25 MW capacity requires an investment of at least P1.5 billion.

Zubiri is chief sponsor of a bill at the House of Representatives that seeks to establish a national ethanol program. The bill proposes the grant of fiscal and non-fiscal incentives and tax breaks to ethanol projects.

Bronzeoak Phils. is already involved in the ethanol facility in San Carlos, Negros Occidental. Bronzeoak is the joint venture partner of the National Development Co. (NDC).

The partners formed a joint venture company, San Carlos Bio-Energy Inc. (SCBI) to develop and operate the facility.

The SCBI integrated facility is reported to have a cane milling plant with a through-put capacity of 1,500 metric tons of cane daily and a co-generation power plant that will have a production of about nine megawatts. It has likewise a distillery plant, which will also produce 100,000 liters of bio-ethanol a day.

Petron Corp. recently entered into a memorandum of understanding (MOU) with SCBI, for the use of bio-ethanol for blending with its gasoline products.