Senator Win Gatchalian has urged the Department of Energy (DOE) and other government agencies to be on the guard against unscrupulous traders who will take advantage of the rising pump prices in the aftermath of the Saudi oil field attacks.
Gatchalian, chair of the Senate Committee on Energy, pointed out that the fuel price increase that the Filipinos experience this week is only temporary and he expects the price to normalize in the coming weeks when the Saudi Arabian Oil Company (ARAMCO) resumes its normal production by the end of the month.
While he considers the recent round of oil price hike as regular, the lawmaker stressed during the Senate inquiry on the Department of Energy’s security plans following the drone strikes on Saudi ARAMCO’s key facilities last week that there is no reason for other commodity prices to spike as a result of the attacks.
“Pricing is also very important, considering that this is a deregulated industry, we’ve given free hand to the private sector to do business, to import, to sell and to transact. However, government needs to make sure that the public is protected and the public is not being abused by any shock or any aberration happening,” he added.
Gatchalian probed the DOE on its short-, medium-, and long-term plans to achieve energy security and mitigate the adverse repercussions of price and supply shocks on the country’s oil supply and prices following the ARAMCO attack.
Rino Abad, director of DOE’s Oil Industry Management Bureau, informed Gatchalian that the Energy department plans to bring up to President Rodrigo Duterte the idea of creating an Oil Contingency Task Force that will predict, prepare, and perform contingency scenarios during times of supply disruptions such as the ARAMCO attack.
The duties of the proposed DOE-led task force, which will be created through an executive order, include monitoring developments in the oil market; increasing minimum inventories required for private oil firms; and preparing and executing interventions during a supply crisis, among others. Should a national emergency be declared, the task force will be given the authority to impose fuel allocations and to takeover private oil companies.
The task force will be composed of representatives from the Department of Trade and Industry, Department of Agriculture, Department of the Interior and Local Government, Department of Transportation, the Department of Foreign Affairs, and the National Security Council, among others.
Gatchalian, for his part, believes that monitoring of and preparing for supply shocks should not be dependent on the creation of the oil contingency task force but the DOE should be at the forefront of it.
“Yung mga ganitong panahon po, importante po dito yung blow-by-blow updates from the DOE so that we also understand the contingency measures in place or will be in place until the oil markets calm down, and for the public to be assured that there will be no supply disruptions to our transportation as well as our industries,” Gatchalian said.
On September 14, the Saudi ARAMCO oil fields were hit with drone strikes, carving almost 5.7 million barrels of oil out of the market. The figure is equivalent to around 58% of Saudi ARAMCO supply, affecting about 5% of global supply of oil.
Meanwhile, the Philippines is importing 96% of its crude oil as of June 2019, with 5% of the country’s total crude and finished petroleum supply coming from Saudi Arabia. Sixty-eight percent of petroleum supply in the Philippines is consumed by the transportation sector, while power generation uses 5%. Eleven percent is for commercial use, 5% for manufacturing, and the remaining 11% is used by other industries including agriculture, mining, and construction.