Government prepares oil supply contingency plans

The government is readying contingency plans to ensure the country’s steady oil supply in case the United States attacks Iraq.

Officials said yesterday that in a national emergency, the government may impose fuel rationing and other conservation measures.

Energy Secretary Vincent Perez said starting Feb. 3, oil refineries should start implementing a minimum inventory good for at least 30 days.

"Upon an assessment of international and domestic events affecting the oil industry, I hereby activate the minimum inventory requirements of petroleum crude oil and products of all oil companies and bulk suppliers operating in the country," he said.

Perez said the minimum oil inventory is part of the government’s overall oil contingency plan to ensure oil supply amid a looming war in the Middle East.

Energy Undersecretary Jose Emmanuel de Dios said the government may also limit the operating hours of gasoline stations if President Arroyo declares a state of national emergency.

Other conservation measures may be carried out such as limiting the use of vehicles through car pooling and color-coding, he added.

Under Executive Order No. 134, oil companies (new players), except oil refineries, must maintain a minimum inventory of 15 days.

All oil refineries or companies are required to keep a seven-day inventory of liquefied petroleum gas (LPG).

At present, oil refineries maintain a minimum inventory of 62 days, of which 25 days are the so-called "in transit" — crude oil and petroleum products not yet in the country but already purchased by oil firms — and 37 days "in country inventory" — crude oil/petroleum products already in the country.

Meanwhile, Perez said the Department of Energy (DOE) is trying to convince the City of Manila to reconsider its decision to shut down the Pandacan oil depot.

"The DOE is concerned about the threat that the Pandacan depot is poised to be shut down by the end of the month to give way to Manila’s urban renewal development program," he said.

However, Perez said the national government will not take over the facility should the city government insist on shutting it down.

"We are not thinking about that yet," he said. "That is far from our plans."

Perez said Manila city officials should consider the impact on the entire country of its decision to close down the Pandacan oil depot.

"The Manila city government should allow oil companies to continue with their operations by re-issuing their respective permits," he said.

"Substantial compliance is immaterial if national interest will be impaired. The greater national and public interest require that the Pandacan oil depot be allowed to operate at its present location."

Perez said the continued operation of the Pandacan oil depot is part of the government’s oil supply security initiatives under its oil contingency plan.

"Maintaining the Pandacan oil depot in its present location is a critical factor in the effectiveness of our national contingency plan to mitigate the impact of the possible oil supply crisis," he said.

The Pandacan oil depot supplies more than 50 percent of Northern Luzon’s and more than 90 percent of Metro Manila’s fuel needs.

Manila has threatened not to renew the licenses of the "Big 3" oil companies–Petron Corp., Pilipinas Shell Petroleum Corp. and Caltex Philippines Inc.– for failing to scale down the depot’s operations as agreed upon with the city government.