Manila issues permit to Big 3 oil firms

It’s business as usual at the Pandacan oil depot after the Manila City government decided to issue a special temporary business permit for the three oil companies.

The issuance of a temporary permit was an offshoot of a Manila Regional Trial Court’s decision to grant the oil firms occupying the oil terminal–Petron Corp., Pilipinas Shell Petroleum Corp. and Caltex Philippines Inc.– a temporary restraining order (TRO) which will last up to 20 days.

At the same time, the Department of Energy (DOE) will continue to convince the Manila City government to consider a long-term solution to the Pandacan problem which is to allow the oil firms to permanently locate at the oil warehouse under a scaled down operation.

"We appeal to Mayor Lito Atienza and the Manila City Council to allow the oil firms to operate in the depot," Energy Secretary Vincent S. Perez said.

But Perez also called on the oil companies to fast track the construction of a linear park as part of the buffer zone that will protect the residents living near the Pandacan oil facility.

In the meantime, Energy undersecretary Jose Emmanuel de Dios said the DOE and the oil firms will use the 20 days provided under the TRO to seek for a permanent solution to this problem.

"Obviously, it is now in the hands of the court. But we will continue to appeal to the Manila City Council," de Dios said, when asked what will be the next move of the government to ensure that there will be no supply disruption while the case is being litigated in courts.

Perez said they have decided not to disband yet the Energy Contingency Task Force (ECTF) until the Pandacan problem is resolved.

The energy chief had said they are planning to deactivate the ECTF since the US-Iraq war was over.

"We need to maintain the ECTF until this crisis is resolved. But we will no longer be concerned about the US-Iraq war but the issue of Pandacan terminal."

In a paper prepared by the Department of Energy (DOE), it said the cessation of operations in the Pandacan oil depots will have an adverse effect on the country’s economy.

"This will result to difficulty in supply sourcing since Pandacan is considered a critical storage hub in the country from which about 50 percent of Luzon’s total oil demand and 82 percent of Metro Manila’s total oil demand is stored and sourced," it said.

The DOE noted that the Pandacan oil depot supplies 40 percent of the country’s total oil demand; 70 percent of fuel requirements in the shipping industry; 90 percent of all lubricants; 73 percent of all aviation fuel; 50 percent of oil requirements for power generation and 25 percent of the chemicals used by various industries including manufacturing, construction and others.

Other effects of the possible shutdown of the oil facility include: artificial fuel shortages brought about by the lack of nearby storage facilities sufficient to meet demand; shortage of tank truck loading capability in the alternative supply sources (e.g. Bataan and Batangas refineries; Cavite bulk plant); congestion of major thoroughfares, particularly the South Luzon Expressway and Metro Manila roads, brought about by the increased number of tank trucks from 800 to 1,200 trucks daily that need to bring the petroleum products to their destinations (Shell and Caltex have been transporting petroleum products to Pandacan via 120 kilometer white oil pipeline from Batangas); shortage of tank trucks to move the daily requirement in affected areas; and increased safety and health hazards to the public brought about by the increased number of tank trucks in the streets.