Oil prices in local pumps will have mixed adjustments this week to reflect the movement of world oil prices.
Oil companies are likely to increase diesel pump prices by as much as P0.25 per liter but will roll back gasoline prices by as much as P0.30 per liter effective Tuesday.
“Expect fuel prices to have mixed movement next week (May 18 to 24). Diesel will increase by P0.20 to P0.25 per liter. Gasoline will go down by P0.20 to P0.30 per liter,” Unioil Philippines said in its weekly advisory.
On May 11, local oil companies increased domestic oil products. Gasoline rose by P0.75 per liter while both diesel and kerosene increased P0.70 per liter.
These resulted to the year-to-date adjustments to stand at total net increase of P8.55 per liter for gasoline, P6.75 per liter for diesel, and P6 per liter for kerosene.
Meanwhile, the Department of Energy’s latest report showed the number of downstream oil industry participants rise by almost 8 percent to 383 last year from 355 in 2019, bringing in a total accumulated investment of P190.28 billion.
The downstream oil industry reported an increase of 8.58 percent of retail outlets operating nationwide, bringing in a total of 10,186 retail outlets nationwide as of end 2020.
The country’s demand for petroleum products totaled 22,581 million liters (ML) in 2020, down by 17.3 percent from 27,319 ML last year.
This can be translated to an average daily requirement of 61.7 ML compared with last year’s level of 74.9 ML.
With community quarantines still up in the country to curb the spread of COVID-19, DOE said the decrease in demand is attributed to reduced economic activity due to lockdown and travel restrictions.
In terms of market share, Petron Corp. captured 20.13 percent, followed by Pilipinas Shell Petroleum Corp. at 17.95 percent, Phoenix Petroleum Philippines at 7.1 percent, Unioil at 6.9 percent, and Chevron Philippines at 5.84 percent.
As this developed, DOE last week signed a memorandum of agreement with Japan Oil, Gas, and Metals National Corp. (JOGMEC) for the study of country’s planned strategic petroleum reserve and national oil contingency plan.
“The MOU that we are signing today is another solid manifestation of the special friendship that our country, the Philippines, enjoy with Japan. Even before the COVID-19 pandemic, energy security has always been at the core of our policy agenda,” Energy Secretary Alfonso Cusi said.
“We have been proactively seeking all potential ways to ensure the availability of sufficient energy supply, most especially in the face of local or global disruptions such as geopolitical movements, global market volatilities, and more recently, this COVID health crisis,” he added.
DOE is currently updating the Oil Contingency Plan that would provide current and deeper insights into how the Philippines could better secure its national fuel supply, especially during severe interruptions, the energy chief said.
“This is particularly important – a national security matter even – given that our country is an oil and petroleum product importer with very limited indigenous supply capability,” Cusi said.
He said the establishment and operation of a Strategic Petroleum Reserve is one of the most reliable forms of securing contingency supplies.
“Therefore, I had endorsed this to the Philippine National Oil Company, so they may conduct an in-depth study on building up our fuel reserves and develop a reference benchmark to fast-track its operationalization,” Cusi said.
He also expressed confidence the DOE-Oil Industry Management Bureau and JOGMEC will be able to proceed with all the required activities in the next eight months.
The SPR is envisioned by PNOC as large stockpiles of crude oil and/or petroleum products, stored in facilities located around the country, and possibly overseas.
It is aimed at ensuring the long-term stability and security of oil supply in the country even in times of geopolitical events, calamities or emergencies which include global supply disruptions.
Tetsuhiro Hosono, JOGMEC chairman and chief executive officer of Japan Oil, Gas and Metals, said he believes in the importance of oil stockpiling in the Asean region.
“JOGMEC has obtained the cooperation of METI or the Ministry of Economy and Trade and Industry and supported Asean and East Asean countries’ efforts for the creation and operation of petroleum reserve programs,” Hosono said.
“It was also decided at this time that we will jointly conduct a study for creating and operating petroleum reserve programs jointly with the Philippine Department of Energy based on the memorandum of agreement,” he added.
Hosono said it is a great honor for JOGMEC to be entrusted for the study and recommendations that are conducive to creating and operating a strategic petroleum reserve program as the Philippines works for the revision of the national oil contingency plan formulated in 2002.
“We will do our outmost to conduct the study and make recommendations in a solid fashion,” the JOGMEC official said.
Along with the MOA, METI is looking toward concluding “a memorandum of cooperation on the establishment of emergency supply framework with the DOE and that everything is set for building a broader and deeper energy cooperation between the two countries.”
Shimoseko Mitsuyoshi, Director of Petroleum Refining and Reserve Division of METI, acknowledged the importance of energy security in Asia.
“It is vitally important for Japan which has a supply chain in Asia to secure energy security in Asia as the situation in the Middle East continues to be tense. The Japanese government is therefore promoting the cooperation of oil stockpiling according to the situation of each country in Asia,” Mitsuyoshi said.
Following the conclusion of the MOA, he said METI is working in the final adjustment of a memorandum of cooperation in the establishment of an energy supply framework with DOE.
The MOA is an offshoot of the DOE’s collaboration with Japan’s METI and JOGMEC to update the 2002 METI study, “Master Plan for the Development of Stockpiling for the Philippines.”
Under the MOA, JOGMEC will conduct a study within eight months of its signing, and the parties shall have a one-year consultative period after the submission of the final report.
