RP has enough oil supply, assures Perez

Energy Secretary Vincent S. Perez assured yesterday that the country has an adequate supply of crude amid the uncertainties and tension in the Middle East brought about by the possibility of a US military strike against Iraq.

Based on Department of Energy (DOE) data, the crude and petroleum products stock inventory by the three major oil firms-Caltex (Phils.), Inc., Petron Corp. and Pilipinas Shell Petroleum Corp.- stands at 63 days, or way above the normal level of 40 days supply.

"There is some concern on the impact of a possible military action against Iraq, which could affect the security of oil supply worldwide in the long-term. Let me assure, however, that there is sufficient oil supply in the country," he said.

Perez added that "inventories by the major oil companies indicate a supply of at least 63 days. This is a conservative number given that it does not include the stocks of the new oil players that import petroleum products abroad."

He noted that the crude and petroleum product stocks of the major oil companies stand at 20 days of supply each while crude in transit could last another 23 days.

He said government has prepared a National Oil Contigency Plan to address any possible disruption in oil supply triggered by external factors such as crisis in the oil producing countries, major reduction in the Organization of Petroleum Exporting Countries (OPEC) crude output and the continuous threat of a US attack on Iraq.

"The National Oil Contingency Plan, which was prepared by the DOE and other government agencies together with the local oil industry, details the country’s preparedness and action on the effects of these external events on the local oil supply," he added.

Perez said, "we want to ensure that priority sectors will continue to operate, and overall economic activities will not be severely disrupted if there will be any tightening of oil supply."

According to Perez, other measures that will be undertaken should there be a disruption in oil supply include: continuous monitoring of oil inventory, implementation of fuel allocation and creation of an Energy Contingency Task Force to address that threat of an oil supply shortage.

"Oil is a basic input to production and constitutes about 45 percent of total energy demand. However with the commercial operation of natural gas and the decommissioning of oil based power plants, the projected impact of oil supply in the power sector as fuel source has been lessened," he said.

The energy chief said as of June this year, the use of oil in the power generation mix has been limited to only 13.8 percent from 21 percent as of end-December 2001 and from a high of 56.8 percent dependence on oil in 1995.