PNoy asked to certify bill creating permanent fuel reserve
REP. ARNEL TY of the party-list group LPG Marketers’ Association (LPG/MA) asked Malacañang to certify as urgent a bill introduced by him in the House and Liberal Party Sen. Teofisto “TG” Guingona III in the Senate seeking to establish a permanent Strategic Petroleum Reserve (SPR) that would provide a ready supply of extra fuel products during a crisis.
“There is really a need for us to create a state-controlled emergency stockpile of refined petroleum products, to secure our requirements – estimated at the equivalent of 300,000 barrels of oil per day,” said Ty, a member of the House energy committee.
He cited the need for the government “to serve as the people’s supplier of last resort in the event of potential fuel shortages.”
Ty lauded President Aquino for taking swift action to secure the country’s immediate fuel requirements.
The President declared Friday that his administration will start stockpiling fuel supplies “for use in extraordinary need.”
The Chief Executive said an initial shipment of 50 million liters of diesel is due to arrive next month and would be hoarded in tank farms to be leased by a subsidiary of the state-owned Philippine National Oil Co. (PNOC).
Ty stressed the need to make the emergency stockpiling of fuel reserves a State policy through the creation of a lasting SPR.
“We are respectfully asking the President to consider certifying our bill as urgent,” Ty said.
Ty is author of House Bill 4526, which proposes to put up the SPR, to be launched and maintained by the PNOC. Guingona has the same proposal contained in Senate Bill 159.
Tasking the PNOC to set up the SPR is consistent with the firm’s mandate, under Presidential Decree 334, to provide and maintain an adequate and stable supply of oil and refined fuel products for the domestic requirement, Ty said.
As proposed by Ty and Guingona, the PNOC would have to establish the SPR within 26 months after their bills are enacted.
Funding for the SPR, which would initially store ready-to-use gasoline, diesel, and liquefied petroleum gas, would be sourced from the annual General Appropriations Act.
Guingona proposed that if necessary, additional funding for the SPR may be obtained from the sale of certain PNOC assets.
Ty suggested that supplemental funds for the SPR may be sourced from the royalties earned by the government from the commercial exploitation of the country’s natural gas and crude oil deposits.
The lingering social upheaval and political unrest in the oil-producing countries of the Middle East and North Africa have revived fears of possible disruptions to and reductions in the global production and supply of crude oil.
This in turn has roiled the global oil markets, pushing up prices to their highest levels in 30 months.
Worries that the country might face a shortage of finished petroleum products recently prompted the Philippine government to obtain assurances from its neighbor, Indonesia, for extra supplies should the need arise in the future.
“The creation of the SPR will also give flesh to the country’s commitment under the Association of Southeast Asian Nations Petroleum Security Agreement, which encourages members to build extra stockpiles and forge emergency oil-sharing agreements,” Ty said.
At present, the country’s oil industry players have a product inventory enough for up to 45 days.