Oil lib led to lower pump prices – Reyes

Energy Secretary Angelo Reyes said the deregulation of the country’s oil industry has resulted in lower fuel pump prices.

“I would like to tell you that we in the Philippines have made significant gains in the deregulation of our downstream oil industry. Our early deregulation has made pump prices lower than would be possible in the old regulated regime,” Reyes told delegates at the ASEAN Energy Business Forum (AEBF).

Reyes said the strategy has insulated the government’s fiscal purse from the high cost of subsidizing oil prices at the pump.

According to Reyes, the government  expects to reap the fruits of its privatization efforts in the power generation sector.

President Arroyo has stressed the importance of privatizing the power sector in a meeting with Reyes last week at the offices of the Department of Energy (DOE).

In line with the National Government’s thrust in the energy sector, Reyes has directed a review of the privatization timetable to expedite its implementation.

”We have adopted reforms in the energy sector to bring about greater efficiency in the generation, transmission and distribution of electricity,” Reyes told the AEBF conference.

“Our long-term vision is to have vibrant competition in the generation and supply of electricity to the consumer,” he added.

The energy chief also informed the delegates of the AEBF that the wholesale electricity spot market (WESM) commenced last year in the Philippines, specifically in its Luzon grid, thus providing options for consumers in sourcing their electricity and allowing a more transparent price setting mechanism.

“Foreign investors are welcome to participate in the ongoing process of privatization and we assure them of a stable and attractive investment environment,” he said.

The DOE chief said that for the upstream energy sector, the bidding rounds are being conducted for certain areas for geothermal, coal, oil and gas.

Renewed interest is being directed towards the exploration, development and production of petroleum resources in the country following the Philippine Supreme Court ruling that allows 100 percent foreign ownership, he added.

“We also need prospective investors for the construction of strategic natural gas infrastructure projects to expand the use of natural gas in Luzon, the major island of the country where the demand concentration for natural gas is projected to increase significantly in the next 10 years,” Reyes said.

At the same time, Reyes said investments in biofuels is being encouraged in the Philippines with the passage of the Biofuels Act.