Big 3 oil firms mull jt ethanol importation to save on costs

To save on costs, the country’s Big 3 oil players – Pilipinas Shell Petroleum Corp., Petron Corp. and Chevron Philippines – are contemplating on a possible joint importation of their bioethanol requirements.

Shell country chairman Edgar Chua said they may get higher discounts from their suppliers if they will purchase in bulk.

Under the Biofuels act, the country’s oil firms are mandated to increase the biodiesel blend to two percent from the current one percent and five percent ethanol blend in gasoline starting 2009.

“We have asked (Petron, Chevron) to implement the law ahead of the mandate and this will be a joint shipment in buying more imports,” Chua said.

At present, Shell sources its ethanol requirements from Brazil. A few months ago, Shell opted to offer a B-10 blended ethanol in several of its retail stations months ahead of schedule.

The Shell official admitted that the country will not be able to produce the ethanol blend requirements of oil firms thus the need to import. 

San Carlos Bioenergy Inc., which will supply ethanol to Petron, will only be operational by next year.

Meanwhile, Leyte Agri Corp. in Ormoc has only started producing ethanol.  Leyte Agri is a subsidiary of TAO Corp., one of the country’s premier holding companies focused on supply chain services.

Chua said since ethanol-blended gasoline is P2 per liter cheaper than regular gasoline, they foresee apossible shortage of supply at the pump level.

“We now have more than 100 gasoline stations with ethanol. We have been selling ethanol ahead of the other majors,” Chua said.

Aside from ethanol, the law mandates a two percent biodiesel blend by 2009. Government started implementing the one percent biodiesel blend in May last year.

Shell spent around P100 million for its E10 program in 2006, using the capital to upgrade its storage facilities to accommodate bioethanol. 

The Department of Energy said only qualified entities shall be allowed to import unblended or base diesel for their own use or commercial purpose.

To qualify, they will have to secure certification from the department that they have the capability and capacity to blend imported unblended diesel with the required biofuel component.