MANILA, Philippines - Malacañang will not initiate a meeting with executives of oil companies amid the spate of oil price increases following political tensions in the Middle East and North Africa.
“There are no plans to meet with the oil companies right now and certainly the oil companies are also sensitive with respect to increasing prices, because if you increase price, there’s a tendency for the consumers to use less gasoline,” presidential spokesman Edwin Lacierda said.
Lacierda said President Aquino has been meeting with Energy Secretary Jose Rene Almendras and discussing ways to deal with the surge in oil prices in the world market that also affected the local prices of petroleum products.
Secretary Ricky Carandang said an interagency committee to be headed by the Department of Energy is being created upon orders of the President.
Carandang said the committee would recommend contingencies in case of a disruption in global fuel supply.
“The committee will be officially formed after the order is signed... Secretary Almendras will announce the contingency plan once it is prepared,” he said.
Lacierda said the creation of an Oil Price Stabilization Fund (OPSF) is already out of the question, it being very costly.
“To put up the OPSF will require $2 billion. The price is too hefty so it would not be on the radar now,” Lacierda said.
“We’re looking at other options and that’s what the President is discussing with Secretary Almendras,” he said.
Lacierda also assured the public that the country has enough oil supply amid tensions abroad.
“We have no problems on oil supply right now. We have enough supply but these are contingency plans, just to ensure that we will have a continuous supply of oil. But, for now, we have no problem with that,” Lacierda said. According to Lacierda, Malacañang just wanted to ensure the continuous supply of oil. He said the current contingency plans being undertaken are “preemptive” in nature.
Almendras also gave assurance the country has enough oil supply for 74 days.
He said the big three oil players – Pilipinas Shell, Petron Corp. and Chevron – have supply that can last up to 49 days while small players have 20 or 25 days’ worth.
“We still have enough supply,” Almendras stressed to reporters in a briefing shortly after his meeting with President Aquino.
Almendras met with the President at the Presidential Guesthouse where they discussed contingency plans to avert oil shortage.
Almendras downplayed speculations the country may reach its worst-case scenario, pointing out this would be possible if there was an “interruption” or “disruption” of oil supply to the Philippines coming from Saudi Arabia.
“At this point, I don’t see any threat from (the) Saudi Arabia (oil supply),” he stressed.
“But this is not the time to talk about it because there is no emergency. But yes, there are already contingency plans that the President has instructed, on the assumption that this situation gets worse,” he said.
Almendras said the possibility of rationing is far-fetched, although this, of course, should not be ruled out.
“I don’t know. But if there will be a cut on the supply of oil, then probably we’ll even have to (resort to rationing),” he said.
At the same time, Almendras ruled out the creation of the OPSF or repealing the Oil Deregulation Law.
He said the OPSF subsidy would entail one-third of the country’s annual P1.645-trillion budget.
Almendras also clarified that removing the VAT on oil was not among the issues he discussed with the President.
As to subsidies, Almendras said most of the countries that did so are bleeding.
Oil price increases are inevitable at this point, he said, borne out of the tensions in oil-producing countries.
“This is why the Department of Energy is already finding ways to remove the country’s dependence on oil, even if the oil prices eventually stabilize,” Almendras said.