Petron allots $74M for CAA compliance

Oil refiner Petron Corp. plans to invest about $74 million to prepare for its eventual compliance to stricter requirements of the Clean Air Act (CAA).

The CAA (Republic Act 8749) requires oil companies to reduce the sulfur content of automotive diesel from 0.05 percent to 0.025 percent by 2010.

“Petron is setting aside a $74-million budget for that. When the time comes that we need to comply, we will be ready and we will be there to comply,” a company official, who requested anonymity, said.

According to the official, compliance to the next level of requirement under the CAA is already part of Petron’s medium-term plan.

“It will not require much investment. We will just put an equipment called Merox to be CAA-compliant,” the official said.

The official also boasted that Petron has been upgrading its facilities to meet the requirement of the law.

“We have to prepare for it. For instance, even before the entry of the blend of CME (coco-methyl ester), we are saying we are ready for that,” the official said.

Petron has so far invested $300 million to meet the present stringent requirement of the CAA and produce CAA-compliant fuels.

Meanwhile, industry sources said Pilipinas Shell Petroleum Corp. may also be readying for the stricter CAA requirement.

Eastern Petroleum Corp. chairman and president Fernando Martinez, who is also the chairman of the Independent Philippine Petroleum Companies Association (IPPCA), on the other hand, said the small players are planning to introduce ahead of schedule the new requirement under the cleaner air law.

“We can do it before 2010. We can introduce the cleaner diesel products even next year,” he said.

Martinez said Eastern, for its part, has sealed an agreement with a Taiwanese oil refining firm to ensure a steady supply of CAA-compliant fuels.

“We will not have a problem with regard to the CAA compliance. Our supplier can produce and supply this CAA-compliant petroleum products,” he said.