RP to lead protest vs OPEC squeeze

President Arroyo has dispatched Department of Energy (DoE) Secretary Vicente Perez to Amsterdam to raise the voice of protest of oil-dependent nations like the Philippines before members of the Organization of Petroleum Exporting Countries (OPEC) gathered in this European capital for the ninth International Energy Forum (IEF).

In a television interview before he left, Perez said he will attempt to use "economic diplomacy" in the IEF to plead the case of energy importing countries reeling over the "historic high" prices of crude oil.

Perez feared the prospect of another round of oil price increases in the next few weeks unless oil producing countries agree to bring down crude prices.

"We will talk to our friends from Saudi Arabia, which has been a long-time investor in the Philippine oil sector through Petron Corp., Kuwait and Indonesia to also consider the situation of all the oil importing countries," he said.

Perez was cautious over his mission’s chances of success.

"Let us see if we can use goodwill so these oil producing countries will listen to the predicament of those countries importing oil like the US, Thailand and the Philippines," he said.

Perez earlier said Mrs. Arroyo was openly supportive of the growing global clamor for increased oil production since this could help ease international pump prices.

He said the government supports a Saudi proposal that OPEC members raise their production by at least 1.5 million barrels a day.

In an interview over the government-run Radyo ng Bayan, deputy presidential spokesman Ricardo Saludo confirmed that Mrs. Arroyo had instructed Perez to "talk to the leaders and ministers of the OPEC now meeting there in Amsterdam."

Saludo pinned the blame for the country’s oil woes on the continuing rise in crude prices in the international market.

"This is really a problem of our country. And the root of this is that the price of oil in the world market has really been going up and up," he said.

Monitoring by the DoE showed world oil prices to "have been relentlessly increasing in the past four months," a trend likely to continue with the "still unresolved conflict" in major oil producer Iraq.

DoE records showed that the price of Dubai crude pegged last May 17 at $36.22 per barrel was the "highest in 13 years."

International prices of diesel last month increased by $4.40 (or about 1.55 peso/liter), from the March average of $38.05 per barrel to $42.82 per barrel in April, while as of May 13 diesel prices posted an average $45.18 per barrel, or $2.36 per barrel (about 0.83 peso/liter) higher as compared with April prices.

Prices for unleaded gasoline in the global market are also on an upward trend. As of May 13, the average price for unleaded gasoline stood at $48.75 per barrel, higher by $4.65 per barrel (or about 1.64 peso per liter) compared to $44.10 per barrel posted last April.

The government isn’t limiting its petroleum diplomacy to the Amsterdam forum.

Perez said that the DoE is also pushing for the use of Subic as one of the oil storage facilities in Asia.

"In case supply from Middle East will be cut, we will not have problem since we have an oil depot here in Subic," he said.

On the local front, Perez said the government intends to use "moral suasion" to convince local oil companies to maintain the discount being given to public transport groups until world crude prices stabilize.

The DOE is also involved in a pilot project to field buses using compressed natural gas (CNG).

"We are able to buy natural gas in our Malampaya oil project at P10 per liter, lower than the P19 per liter of diesel," he said.

But one move that isn’t on the government’s list of emergency measures is the restoration of the Oil Price Stabilization Fund (OPSF), a buffer that was used by oil firms to shield themselves from oil price volatility.