According to the Institute for Development and Econometric Analysis, Inc. (IDEA) Industry Trends, a regular publication produced by IDEA, Inc. It reported that “as of December 2010, the actual total country crudes and petroleum products inventory was recorded at 13,821 MB; which was 18.5 percent higher compared with last year’s end-December level of 11,666 MB, but competing demand from different sectors compels the oil retailing industry to rely on importation given the limited domestic supply.
Import volume of finished petroleum products, however, fell by 6.4 percent to 54,123 MB in 2010 from last year’s 57,843 MB. This contraction was partly attributed, according to the DoE, to the high crude import volume and increased refinery production output during the said period. In addition, imports of kerosene and avturbo, LPG, fuel oil, diesel oil, and unleaded gasoline also contracted by 14.3, 9.0, 6.5, 6.2 and 5.7 percent, correspondingly, as compared to year ago levels”.
Furthermore, the same published report revealed that, major industry players (i.e., Petron, Chevron and Shell) experienced reductions on their total import volume to 26,275 MB from 35,337 MB in 2009. On the contrary, other industry players’ import volume grew by 23.7 percent to 27,848 MB from 22,506 MB in the same period. Local refiners Petron and Pilipinas Shell accounted for 25.3 percent of the total product imports, while the remaining 74.7 percent was attributed to direct importers.
Imported petroleum products were comprised mostly of diesel oil at 41.3 percent, unleaded gasoline at 23.2 percent, LPG at 16.2 percent, fuel oil at 9.6 percent, kerosene and avturbo at 7.0 percent and other products at 2.7 percent. In general, 48.4 percent of petroleum’s total product demand was supplied through importation. The total gasoline import supplied 51.0 percent of the gasoline’s total domestic demand, while diesel oil import provided 49.6 percent of diesel’s demand. LPG import on the other hand, was 69.8 percent of LPG demand.
The Department of Energy (DoE) pushes the plan of developing a strategic oil reserve in order to ensure the country’s oil security and to safeguard the Philippines from price shocks in the world market. Energy Undersecretary Jose Layug Jr. said that Subic and Batangas are being considered as possible areas for the establishment of a regional petroleum stockpile.
The department also reveals that the government is already looking for potential investors and has identified specific areas in the two provinces—one of which is the Subic Bay Terminal. The government considers as well returning to the downstream oil industry to complement the potential venture of strategic oil reserve.
The Philippine National Oil Company is again being elected to be the government’s subsidiary to take on the task of making the strategic reserve mechanism successful. Energy Secretary Jose Rene Almendras believed that the PNOC is allowed to go into the oil downstream business under its mandate. Moreover, the secretary reiterated that the government’s main objective is to act as a catalyst in keeping the country’s oil supply stable by encouraging more competition in the oil retailing market according to IDEA.
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