DOE prepares measures to address oil supply concerns

September 22, 2019

The Department of Energy, together with the proposed members of the Oil Contingency Task Force (OCTF), reconvened last Friday to finalize the working draft establishing the inter-agency working group that would implement the country's contingency strategies as prices of oil are expected to rise following the Aramco drone attack in Saudi Arabia.

"We realize the importance of addressing issues beforehand so that the government may have contingency measures to sustain the country’s economic growth and provide basic services to the people,” Energy Secretary Alfonso Cusi said.

The OCTF was activated in preparation for natural or man-made disasters to address the country's immediate oil supply concerns and the impact of the geopolitical and disaster-related events that may cause supply disruptions or sharp volatility in the world oil prices.

“The activation of the OCTF is vital to our resiliency because we are currently dependent on oil imports,” said Cusi.

The energy secretary in a forum said the country’s current oil supply could last for 30 days.

Based on DOE data, one-third of the country's oil supply comes from the United Arab Emirates, while about 26 percent is sourced from Kuwait.

In a separate meeting, the DOE called on the oil industry players to talk about the possible effects of world oil prices in the country’s economy.

It said the oil players discussed about the strict implementation of the Minimum Inventory Requirement (MIR), which is equivalent to stocks of 30 days for oil refiners, 15 days for bulk marketers, and seven days for liquefied petroleum gas players.

A proposal to increase the MIR to 60 days was also raised but the oil representatives said that the immediate creation of additional infrastructure along with the added logistical demand may prove costly and detrimental to the current operations.

They also raised other contingency measures, which include the preparation of oil supply replacement and a possible increase in the biofuel blends as an option to mitigate potential supply shortages.

In terms of oil prices, the DOE explored the possibility of staggering oil price increases.

Cusi urged the public to practice energy efficiency measures which can contribute in helping not only the country but also the environment.

"The DOE is working 24/7 to address these oil-related concerns brought about by the attacks in one of our biggest oil sources in the Middle East. We are reminding everyone to practice energy efficiency measures like carpooling and the use of public transport so that we may all contribute to help the nation and the environment,” he said.

In his earlier statement, the Energy secretary assured the public that the DOE is closely monitoring the incident and will keep the public properly informed on any developments.

“We are seeking to ensure that the energy family will be sufficiently prepared to face the potential impact of this unfortunate incident, if any, on the country,” said Cusi.

Reports said local oil companies are set to implement bigger fuel price adjustments next week which the DOE said will likely be at the P2 per liter mark. Ella Dionisio/DMS