MANILA, Philippines — The country’s energy chief ordered state-owned Philippine National Oil Company-Exploration Corporation (PNOC-EC) to prepare for oil trading to stir up competition in a bid to pacify sharp swings in domestic oil prices.
In a statement, Energy Secretary Alfonso Cusi said the PNOC-EC has been directed to engage in the selling of petroleum products sourced from Russia and suppliers outside the Organization of the Petroleum Exporting Countries to independent dealers and individual public consumers.
Meanwhile, the Department of Energy is also planning to stockpile petroleum products from Russia and other non-OPEC nations to cushion the impact of high oil price in the international market.
“The government is aware of the country’s vulnerabilities to abrupt changes in the international oil situation and impending threats on the same, hence we are formulating various strategies to address those vulnerabilities to cushion the impact for our consumers,” said Cusi, who sits as ex-officio chairman of the PNOC-EC.
The Department of Energy’s order came amid strong calls for the suspension of the Tax Reform for Acceleration and Inclusion Act, which has a tax-freeze provision that automatically kicks in when world crude prices hit a certain threshold.
The tax reform law—which lowers personal income taxes while raising excise levies on fuel and “sin” products, among others—has been partly blamed for rising prices of key consumer items in the recent months.
Earlier this month, Brent crude, used to price international oil, rose 77 cents to $80.05 per barrel in London, its highest level since November 2014 amid geopolitical and global economic concerns.
But oil prices closed lower last week after Saudi Arabia and Russia were reported to be considering an increase in production ahead of a key OPEC meeting in Vienna next month.
According to the DOE, the creation of a “strategic petroleum reserve” was founded on a number of joint international studies.
The agency also said it continues to advocate fuel efficiency
Currently, the DOE only requires oil companies to maintain a minimum inventory requirement of in-country stocks equivalent to 30 days of crude and products for refiners, 15 days of products for importers/bulk suppliers, and seven days of liquefied petroleum gas stocks for LPG players.