RP oil import bill soars 22% to $3.6B in first half

The accelerated promotion and development of alternative fuels such as biodiesel and bioethanol cut down the country’s oil demand by 8.16 percent in the first half of 2006 compared to the same period in 2005, a Department of Energy (DOE) report showed.

The DOE report showed that in terms of volume, net oil imports fell to 52.4 million barrels (MMB) in the first six months of 2006 from 57.1 MMB in the same period last year.

However, the oil import bill continued to soar due to the sustained rise in international oil prices during the period.

Energy Secretary Raphael P.M. Lotilla said the country’s net oil import bill for the first half of 2006 increased 22 percent to $3.6 billion from $2.9 billion in 2005.

Meanwhile, the country’s total consumption of petroleum products for the same period also fell by 9.4 percent to 51.4 MMB this year. This translates to an average daily consumption of 284.5 thousand barrels (MB) in the first half of 2006 compared to 314.1 MB in the same period last year.

Lotilla said local oil demand has been decreasing as Filipinos are now becoming more focused on conservation, in view of the unabated rise in the prices of petroleum products in the world market.

To date, biodiesel and bioethanol are available in gasoline stations of Seaoil and Flying V nationwide while Shell is selling bioethanol in selected stations in Metro Manila. Petron, on the other hand, will be selling bioethanol at their pump stations once the San Carlos Bio-energy project comes on stream by 2008.

It is expected that once Congress enacts the Biofuels Bill, local oil demand would shrink further as a result of the mandatory blend of five-percent bioethanol for gasoline and one-percent biodiesel for automotive diesel.

DOE records show that the country’s daily oil consumption peaked at about 385,000 barrels per day in 1997 but decreased to 329,000 barrels per day in 2000 and eventually, to 284,500 barrels per day in the first half of 2006. Last year, net oil imports similarly decreased by 9.7 percent.

The decline in oil consumption is a welcome development in view of the country’s energy independence objectives and following volatile oil prices brought about by geopolitical tensions in the Middle East and weather susceptible refinery capacities worldwide.

The Middle East supplies most of the country’s petroleum requirements with Saudi Arabia supplying 62.8 percent of the country’s crude oil requirements, followed by Iran at 22.7 percent, UAE at 7.3 percent and Qatar at 2.5 percent

The DOE also noted that despite the increasingly restrained demand for oil products, which is an important input in economic activities, the Philippine economy continues to exhibit strong growth at 5.6 percent of gross domestic product (GDP) for the first half of the year.

The DOE is aggressively promoting the widespread utilization of alternative fuels for the transport sector like coco biodiesel, ethanol and autogas to further bring down the country’s import bill and generate savings.

Estimates show that the country could yield 95 million liters of avoided diesel a year by using one percent coco biodiesel blend in its diesel fuel requirements or P3.06 billion in foreign exchange savings.

Studies also show that the use of coco biodiesel increases the mileage of vehicles by at least 10 percent, translating to a reduction in diesel consumption by nine percent or savings for the motorist of around P2.80 per liter.

Coco biodiesel has also met the Philippine National Standards (PNS) as it conforms to international biofuels standards, particularly those prescribed by the World Wide Fuel Charter (WWFC).

The coco biodiesel level being pushed for blending is also well within the recommended limit set by the WWFC. WWFC is composed of automobile and engine manufacturers worldwide.

The government has also adopted several energy conservation and efficiency measures to reduce dependence on imported fuels. These include the issuance of Administrative Order 126 and Administrative Order 110. AO 126 mandated all government agencies and offices to reduce their electricity and fuel consumption by 10 percent while AO 110 establishes the government energy management program.

President Arroyo also created the energy audit team to help put direction and focus on the government’s collective effort to conserve energy as the country deals with the effects of extraordinary high oil prices. The team was tasked by the President to conduct spot checks in government agencies and offices.