MANILA, Philippines - President Aquino has ordered the creation of a committee composed of representatives from various government agencies to review the contingency plan amid possible oil supply threats due to unrests in the Middle East and north Africa.
"An interagency committee headed by the DOE (Department of Energy) is being created under orders of the President, to study contingencies in case of a disruption in global fuel supply," Energy Secretary Jose Almendras told reporters on Mar. 3.
"The committee will be officially formed after the order is signed," he said.
Once President Aquino has signed the formal order creating the interagency panel, it will be composed of representatives from the Energy, Local Government and Defense departments, and the Philippine National Police, Almendras said.
For the month of February, the benchmark Dubai crude averaged over $100/barrel from only $92.52/barrel in January hitting a two year and a half high of nearly $112/barrel on February 24. Finished product prices also surged following the significant increase in crude prices.
On Wednesday, the Energy department reimposed a directive mandating oil companies to maintain at least 15 days’ worth of inventory.
On Thursday, another circular was issued urging oil firms to "engage in mutual product sharing accommodations and similar industry practices to stabilize oil supply."
Almendras said on-shore supply was currently equivalent to 49 days for the big oil players, broken down into 24 days’ worth of finished products and another 25 days’ worth of crude oil. He said small players had an average of 20-25 days’ worth of stock.
The Energy chief also said, "we’re already exploring the option of trying to get more oil from other countries than the Middle East," noting that oil companies have already started buying oil from Russia.
Energy contingency task force
Almendras previously discussed the Energy Contingency Task Force, or the ECTF.
"It is a staggered response to a potential shortage situation. We have not yet activated it. We will activate it at the right time," he explained.
The right time, he said, is when there is a "threat to supply," which then triggers a calibrated response.
The first stage is the organization of a technical working group that would prepare the mechanism and infrastructure to handle the crisis.
"We have not activated it yet because there is no "perceived significant" risks yet as of today. I cannot speak for the future," he stressed.
"We are monitoring data and information coming from the region. If we feel that we need to prepare already, we will activate [the technical working group]," he explained.
Stage 2 of the calibrated response involves the setting up of the ECTF itself. It will be composed of different Cabinet secretaries who will then prepare and implement a strategic plan "in the event that the president does decide to take emergency action," he said.
This could include rationing of supply, something the DOE has already said they are preparing for.
Lawmakers earlier proposed to grant President Benigno Aquino III emergency powers to help address a possible oil crisis stemming from anti-government movements convulsing in oil-producing Libya and most of the Middle East.
Oil-rich Libya, however, is not a major source of Philippine imports.
Government officials are closely watching developments in Saudi Arabia and Qatar. These 2 Arab countries account for 82% of Philippines' oil imports. - with Lala Rimando, abs-cbnnews.com