DOE issues guidelines on creation of strategic oil reserve

MANILA, Philippines — The Department of Energy has issued the guidelines on the establishment of the country’s strategic petroleum reserve aimed at reducing price and supply shocks from importing oil.

The Philippine Strategic Petroleum Reserve Program (PSRP), which will be implemented by state-run Philippine National Oil Co. and the DOE, would “help bring the country closer to attaining energy security by decreasing our dependence on the importation of crude oil and finished petroleum products to meet our fuel requirements,” said Energy Secretary Alfonso Cusi.

DOE-Oil Industry Management Bureau (OIMB) director Rino Abad said both the agency and PNOC would prepare, review and approve the PSRP feasibility study terms of reference, as well as undertake the SPRP feasibility study within 18 months from the issuance of the policy.

Within 12 months after the feasibility study is approved, PNOC will prepare and jointly review and approve with DOE the work program and budget for the actual implementation of the SPRP, he said.

The DOE will establish a government-owned reserve of crude oil, finished petroleum products and biofuel reserve to enhance the security of fuel supply in the country and address a severe international supply interruption or to implement the Targeted Fuel Relief Program.

PNOC is tasked to acquire the necessary storage and blending capacity by construction, lease, or other acquisition options based on the agreed minimum and maximum volume level determined by the feasibility study and specified on the approved guideline on securing storage and blending facility.

The policy also elaborates that the storage and blending facility should be consistent with the supply contract and products portfolio.

PNOC shall also acquire the appropriate supply contracts and product type portfolio that allows it to secure the necessary volume to attain the PSRP’s objective.

The approval of supply contracts and maintenance of product type portfolio should consider the feasible and sustainable operation of the PSRP in the manner most economical and advantageous to the government.

PNOC is also responsible for establishing the competence to distribute products to the intended purpose of the PSRP, from the transport logistics down to the fuel discharge to the end-consumers.