MANILA, Philippines — The Ethanol Producers Association of the Philippines (EPAP) is opposing a proposal to suspend the Biofuels Act of 2006 and is pushing to raise the blend from 10 to 15 or 20 percent to reduce gasoline prices and generate more savings from avoided greenhouse gas (GHG) emissions.
“What is affecting the prices of gasoline is not bioethanol, it is the tax… We are in fact lowering the price of gasoline,” EPAP chairman Gerardo Tee said in an interview with The STAR.
While Tee acknowledges that domestic ethanol is expensive, ethanol producers import cheaper ethanol to meet the local requirement for blending under the law, which then averages down the retail pump price of gasoline.
“Now that the fuel cost is so high, it is cheaper to use bioethanol. With our importation of 300 million liters [of ethanol], that would pull down the prices of gasoline,” he said.
This is achieved as only 50 percent of the E10 blend is being served by the domestic ethanol, while the other 50 percent is fulfilled by imported ethanol.
Based on prevailing prices last March 16, as shared by EPAP executive director Queenie Rojo, domestic ethanol was priced at P64.33 per liter based on the Sugar Regulatory Administration (SRA) price index, while imported ethanol costs P43.29 per liter.
With the average price of domestic and imported gasoline, industry computation showed that E10 gasoline decreased the pump price by P3.40 per liter versus pure imported gasoline.
Competition in the ethanol industry also pushes ethanol producers to provide discounts to their customers – the oil retailers – as against the SRA price index, which also help lower domestic ethanol prices, Roxas Holdings Inc. executive vice president and chief commercial officer George Chung said.
The possible suspension of the Biofuels Act of 2006 was floated by Energy Secretary Alfonso Cusi in a Cabinet meeting earlier this month to help reduce cost on fuel prices if the oil price crisis continues to worsen.
He cited that during Typhoon Odette in December, the implementation of the biofuel requirement in Bohol was suspended to ensure adequate fuel stocks will be delivered to the island.
“There are other sectors [that] we have to look at it in its entirety… The biofuel, ethanol and coco diesel, it increases the prices. But it also lessens our import. The problem we see with ethanol is we import some,” Cusi said.
Signed into law during the term of President Gloria Macapagal Arroyo, the Biofuels Act of 2006 mandates that all liquid fuels for motors and engines sold in the Philippines shall be blended with biofuels – ethanol for gasoline and coco methyl ester (CME) for diesel.