Almendras pushes for greater transparency on oil output, demand

MANILA, Philippines - Greater transparency on oil output and demand is needed to prevent price spikes, the country’s energy chief said.

Both oil-consuming and oil-producing countries pledged to provide more accurate oil industry data during the recent International Energy Forum (IEF), said Energy Secretary Jose Rene D. Almendras.

“Only when we achieve a more transparent mechanism can the pricing mechanisms work properly,” he said.

“IEF [participants] committed for more transparent system and to make available actual data and information,” Almendras added.

Kuwait hosted the 13th IEF and the 15th International Energy Business Forum last March 12 to 14, which was attended by around 70 oil ministers from around the world.

“Transparency in both physical and financial dimensions of the market is important to understanding oil market dynamics, enhancing the price discovery function and improving energy market stability,” the participants said in the IEF resolution.

“The discussion was that there needs to be an improvement in accounting actual production and consumption numbers. A number of people do not trust the numbers that they see,” Almendras said.

For instance, oil prices have not substantially declined despite Saudi Arabia’s plan to step up output by two million liters per day.

In the Philippines, there were already 10 oil price increases as against three price reductions since the start of the year.

As of March 20, the net increase stood at P6.55 per liter for gasoline and P3.80 per liter for diesel.

The Philippines, for its part, should also have more accurate data on imports of crude oil and finished products, and consumption.

“Businesses also promised to adhere to greater transparency on inventory and actual production numbers,” Almendras said.

In the IEF, both oil producers and buyers did not favor oil price spikes.

“The resolution is that even oil-producing countries do not want prices to be too high because it would be revenue neutral and they would gain nothing from lower demand,” Almendras said.

“Pricing of oil in the world should not be spiky, unpredictable and sudden,” he pointed out.

International oil prices remain high given continued tensions over the nuclear program of top oil producer Iran.