DOE turns to cheaper diesel to stem price hikes

MANILA, Philippines — The Department of Energy (DOE) has directed local oil companies to provide Euro-II compliant automotive diesel oil as its temporary solution to help reduce fuel prices.

DOE also directed oil companies offering Euro-II compliant diesel to submit a monthly compliance report, indicating the list of participating retail outlets.

Energy Secretary Alfonso Cusi said the sale of Euro II diesel would be subjected to close monitoring by the agency.

The Philippine government mandated all fuel companies to sell Euro-IV compliant fuel products starting 2016.

Euro IV is a globally–accepted European emission standard for vehicles which require significantly low amount of sulfur and benzene.  It has a significantly lower sulfur content of 50 ppm (parts per million), compared to the Euro II standard at 500 ppm.

Benzene in gasoline also measures only one percent by volume, compared to five percent for Euro II fuel.

For aromatics, Euro IV fuel will contain only 35 percent by volume, as opposed to Euro II fuel, which prescribes no limit.

Meanwhile, Cusi tapped Philippine National Oil Co.-Exploration Corp. (PNOC-EC) to import low-priced fuel to address slowing growth and high commodity prices.

“PNOC-EC will source low-priced petroleum products particularly diesel, to mitigate the impact of volatile oil prices,” Cusi said.

The measure is expected to have a ripple effect on taming the prices of basic commodities, thus controlling inflation. The resulting price relief will ease the plight of consumers.

Under the project, the trading function of PNOC-EC will be employed in the acquisition of low-priced fuel which will primarily come from state deals.

The PNOC-EC board, chaired by the DOE chief,  is drafting the trading procedure and policy safeguards for the public on the proposed importation.

The agency, however, did not detail where the government-run company will purchase cheaper fuels.

PNOC-EC acquired in December last year a trading function to generate added income for the government.

 The products bought at a special price will be made available to dealers, operators and independent petroleum players under a memorandum of agreement.