Genergex rolls out biofuel supply

In preparation for the eventual implementation of the Biofuels Act (R.A. 9367) next month, Genergex Petroleum Corporation takes one step in advance in complying with the new law by rolling out 10,000 liters of coco-methyl esther (CME).

Genergex president Gerry Malixi said that starting this week, all Genergex stations, and bulk clients of the company, will be supplied with Biodiesel products to anticipate the formal implementation of the law next month.

Under the RA 9367, a one-percent biodiesel blend will be mandated within three months. It will be increased to two percent in two years.

Because this new law, Malixi said there is a high possibility that the diesel price will be 50 centavos to 60 centavos higher. However, this cost will be offset by improved mileage of about 10 percent.

Genergex’s distribution network in Cebu consumes about 1.5 million liters a month, with a chain of 15 gas stations and its industrial clients, such as hotels, shipping companies, and generator set operators.

The company has spent about P750 thousand for the purchase of the 10,000 liters CME. Malixi said the cost of this first roll out will be absorbed by the company.

Next month, Genergex will start to pass on the CME cost to its consumers, within the range of 50 centavos to 60 centavos price jack up.

"We are a month ahead of the law. I would like to introduce it to the market, before Biofuel will be fully implemented next month," Malixi said in an interview.

Malixi expects that the cost of CME will reduce in the next few months, as supply is expected to improve with all gas distribution company will need this product starting next month.

The Biofuels Act or R.A. 9367, which was signed into law recently, provides that all liquid fuels for vehicles sold in the country "shall contain locally produced bio-fuel components."

The law seeks to ensure the steady domestic supply of sugar, coconut and other raw materials to be used in producing bio-fuels. The Sugar Regulatory Administration and the Philippine Coconut Authority (PCA) will be tasked to monitor and regulate the export and import of such goods.

It provides an incentive of zero-rated specific tax on the biofuels component of blended gasoline or diesel.

Biodiesel source can be palm oil, rape seed and soya. Genergex source is from CME, Malixi said.

Genergex now has 15 dealers or refilling stations all over Cebu province, from Santander to Daan Bantayan. It maintains a depot in Lilo-an (Cebu) wharf.