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Solon wants creation of strategic fuel reserves
A lawmaker at the House of Representatives on Wednesday reiterated his call for the establishment of a Philippine Strategic Fuel Reserves (PSFR) following President Rodrigo Duterte’s admission that he could not do anything about oil prices due to the country’s lack of fuel reserves.
In a statement, 1-PACMAN party-list Rep. Michael “Mikee” Romero said the creation of a national strategic fuel reserves would address the country’s lack of fuel reserves and at the same time “act as an anti-inflation measure when world oil prices spike.”
The House Assistant Majority Floor Leader, who is also an economist, said the creation of a PSFR was contained in House Resolution No. 1936 that he filed in May last year, the Philippine News Agency reported.
The resolution authorizes Duterte to draw the necessary amount from the Malampaya Fund to initially establish the PSFR.
It also asks the President to issue an Executive Order to create the PSFR; task the Department of Finance (DOF), Department of Energy (DOE) and the Philippine National Oil Company (PNOC) to set up and operate the PSFR using available, viable and secure storage facilities.
The resolution also urges the Energy Regulatory Commission (ERC) to direct the oil firms to maintain their own fuel reserves at levels sufficient to meet between 45 to 60 days of daily consumer demand.
Meanwhile, Romero noted that a national strategic fuel reserve has long been an option that the DOE has had on its shelves to address energy crises.
For starters, he said the DOE can require oil firms to increase their mandatory minimum fuel buffer from current levels of 15 days to 30 days.
As an incentive for oil companies to increase their inventories, Romero proposed that stocks in the fuel reserves can be exempted from excise and value-added taxes.
“This would make maintaining those reserves financially viable and ultimately good for consumers because fuel from the reserves will be cheaper at the gas pump,” he said.
He added that the strategic fuel reserves idea has also been studied by the energy departments of the Association of Southeast Asian Nations (ASEAN) member countries for some years now.
“The Philippines’ strategic reserves could be part of the ASEAN fuel reserves. If our reserves are not enough to meet domestic needs, we can withdraw from the ASEAN stocks. I hope the DOE will work hard to expedite the work done thus far on the fuel reserves plans,” Romero said.
In his speech Monday at the distribution of Certificates of Land Ownership Awards to farmers in Buluan, Maguindanao, the President pointed out that the Philippines could only rely on imported oil.
He said the Philippines has no “buffer” to deal with oil price hikes in the world market, pointing out that the country is not as blessed as Brunei, Malaysia, and Indonesia which have their own oil resources.