Ethanol-blended gasoline launched

MANILA, Philippines – A bit of relief is in store today for motorists reeling from the soaring pump prices as Petron Corp. joins other oil firms in selling unleaded gasoline mixed with ethanol that is P2 cheaper per liter.

Petron, the country’s largest oil refiner, formally introduced yesterday its ethanol-blended gasoline, which is P2 per liter cheaper than the existing fuel prices.

During the E10 Premium launch, Energy Secretary
Angelo Reyes said Petron’s new product will not only be environment-friendly but will be a welcome development amid the continuing increase in the country’s pump prices.

The other gas companies that offer E10 unleaded gasoline are Shell and Seaoil.

Aside from the P2 per liter drop in price for the gasoline mixed with ethanol, the Department of Energy is also set to certify anew a zero-percent tariff on imported crude oil which will result in an additional P1.50 per liter reduction in diesel prices on July 1.

Since commercial production of ethanol has not yet started in the Philippines, Petron has opted to import 38,000 liters from Brazil to enable it to offer the E10 Premium to 14 of the firm’s gas stations in Metro Manila.

Petron E10 Premium is a new specially formulated unleaded gasoline that meets and exceeds the requirements of the Philippine Biofuels Law. It contains 10 percent fuel grade ethanol and 90 percent Petron premium unleaded gasoline with enhanced fuel additive.

This unique additive allows the removal of existing deposits, which results in improved power and fuel economy.

Ethanol is a high-octane, water-free alcohol produced from sugarcane and other crops such as corn, cassava, and sweet sorghum. It is used as a blending component at five to 10 percent concentrations in gasoline.

Unlike fossil fuels, ethanol is virtually inexhaustible since agricultural products can be grown and harvested continually under a sustainable system.

Petron E10 Premium may be used in a majority of fuel-injected vehicles, whether old or new. It can be used without the need for expensive engine modification. Before filling up with E-10 Premium, however, it is advisable to refer to your car manual or to consult with your car dealer.

Ethanol is widely used in countries such as Brazil, United States and Canada. Recognizing the advantages of ethanol, other countries such as Thailand, China, India and Japan have their own ethanol programs.

The Petron gasoline stations that would offer the E10 premium are located at Visayas Avenue, Quezon City; Marcos Highway (Westbound), Pasig City; Marcos Hi-way (Eastbound), Pasig City; A. Santos Avenue, Parañaque; San Marcelino in Paco, Manila; Quezon Avenue, Quezon City; Osmeña Highway, Makati; Shaw Boulevard, Pasig City; Macapagal Avenue, Pasay City; West Service Road, Parañaque; Circumferential Road, Antipolo; FB Harrison, Manila; Boni Avenue, Mandaluyong; and Ortigas Extension, Taytay, Rizal.

Petron is offering the E10 Premium in selected stations for the meantime, as this product demands double wall storage to prevent any seepage of water.

By the end of this year or early next year, Petron would likely source its ethanol blend requirements from the local market.

Petron chairman Nicasio Alcantara said San Carlos Bioenergy Inc. would start supplying the oil company’s ethanol requirement.

San Carlos and Petron have a 10-year exclusive contract for ethanol supply.

Alcantara said they are also negotiating with Leyte-Agri Corp., owned by the Villanueva family, for a supply of nine million liters.

With a capacity of 30 million liters a year, San Carlos will be able to supply the five percent ethanol blend under the Biofuels Law.

Biofuels Law mandates oil firms to have five percent ethanol blend in their gasoline volume of sales starting January 2009 and this will be increased to 10 percent in 2011. For diesel, they have to have one percent blend.

For 2009, the country will need some 168 million liters of ethanol to meet the five percent requirement of the law. 

Based on DOE estimates, the country can only produce 40 million liters of ethanol next year or by the time the mandated ethanol blend has to be implemented.

It was explained that in the first four years of implementation, the oil companies have an option to import their requirement while waiting for the domestic production of ethanol.

On the fifth year of implementation or in 2011 with a total demand of 223 million liters, if domestic production will not be enough to supply the need, the government, through the National Biofuels Board, has an option to reduce the volume.

“The early introduction of Petron E10 Premium ahead of the government’s mandate is part of our efforts to promote the use of environment-friendly alternative fuels that can be produced locally. Once available in the country, the use of ethanol as an additive to gasoline will lessen our dependence on imported oil,” Alcantara said.

Sen. Juan Miguel Zubiri, main author of the Biofuels Law, said the local sugar industry could produce enough ethanol for blending 3 billion liters of E85. Today, E85 sells for P39.75 per liter. Ethanol-85 or E85 is 85 percent ethanol and 15 percent gasoline.

Since pure ethanol costs P33 per liter to produce locally, it can really lower fuel costs. Right now, E10 is P3 cheaper than premium gasoline that is sold at an average of P56 per liter.

“We can buy E85 at P35 per liter if the law is implemented properly, wherein biofuels raw materials are value-added tax exempt as provided in the Biofuels Law,” Zubiri said.

“We have the technology and skills to produce very high quality diesel from jatropha which grows well in soil with poor condition,” he added.

Zubiri asserted that these biofuel initiatives based on extensive research by the University of the Philippines-Los Baños and other state universities and colleges nationwide “should go hand in hand with the promotion of flex-fuel vehicles for public passenger, cargo transport and private use.”

He added that flex-fuel vehicles, or FFVs, are vehicles designed to run on varying blends of unleaded gasoline with ethanol. FFVs can run on pure gasoline, pure ethanol, or any ratio of gasoline and ethanol. If gasoline prices are high, motorists can easily shift to ethanol.

Ford Philippines plans to market FFVs locally once the necessary infrastructure is in place, such as the production of local bioethanol, he said.

“Among the proven biofuels reduction of greenhouse gas (GHG) emissions, sugar ethanol exhibits 87 to 96 percent less GHG emissions versus that of petroleum. It is superior to ethanol made from corn with only 10-20 percent less GHG emission versus petroleum,” he said.

In coordination with Ford Group Philippines, Zubiri is conducting an educational campaign on biofuels that includes a 12-day biofuel-economy demonstration run on an FFV, a Ford Explorer fueled with E85 being provided by Seaoil.

“Ford, Seaoil and my office have actively partnered in various activities since May. We hope that this 12-day loan of a Ford Explorer fueled with E85 will generate enough public interest among drivers and transport operators to shift to biofuels,” Zubiri said.

Sugarcane farmers in Cagayan, Isabela, Tarlac, Pampanga, Bicol, central Palawan, Negros Oriental, Negros Occidental, Iloilo, Antique, Lanao del Norte, South Cotabato, Sarangani, Agusan del Norte, Agusan del Sur, Bukidnon, Maguindanao and Sultan Kudarat expect a stable market for their produce once ethanol production plants are completed.