Al-Faddagh said the amount would form part of the oil company’s capital expenditure for 2007.
Al-Faddagh said this budget, which was approved by the company’s board recently, will specifically be used to upgrade Petron’s service stations to be able to comply with the Biofuels Law.
"We have a budget now for the ethanol program and we had the Board approval to go ahead with all the conversion we need in our supply chain. We have about P260 million for the ethanol program – for the necessary conversion (some new plants, pipes, holding tank for ethanol)," Al-Faddagh said.
While Petron is readying for ethanol program, Al-Faddagh admitted that it has yet to work out a plan on how to comply with the coco-methyl ester (CME) provision in the law.
Al-Faddagh said since the law is already passed and signed, the government and all the industry stakeholders should work together to make it work.
"Working with the government on the formulation of the IRR, is definitely something we will diligently do," he said.
Just like any other new system, Al-Faddagh said there is a need to make the rules clear.
"It’s just that we want the rules of engagement to be clear. We will not argue this point at all – I mean this is a law and we will comply with it. But it has to make clear issues on liabilities." he said.
Al-Faddagh said one major concern is the security of supply. "There are still uncertainties that have to be addressed. First of all – is there enough supply for the whole Philippines – I mean, at the end, it’s not really acceptable just to offer it in Metro Manila," he explained.
The oil company official said they would be willing to help in solving this issue.
"We could have a facility for CME similar with that for ethanol. But the concern that we have is really on the security of supply."
The Biofuels law mandates a nationwide minimum one percent biodiesel blend in all diesel-fed engines within three months upon effectivity of the Act.
It also mandates at least five percent bioethanol blend within two years upon effectivity of the Act.