DOE Moves To Reduce Dependence On Imported Oil

The Department of Energy (DOE) has issued a directive meant to lessen the country’s vulnerability brought about by disruptions in the supply or price of imported oil.

Issued on 16 September 2021, Department Circular (DC) No. DC2021-09-0028, establishes the “Philippine Strategic Petroleum Reserve Program”.

“This Circular will help bring the country closer to attaining energy security by decreasing our dependence on the importation of crude oil and finished petroleum products to meet our fuel requirements,” Secretary Alfonso G. Cusi said.

In 2019 the DOE had already directed the Philippine National Oil Company (PNOC), under DOE Memorandum Order No. MO2019-11-0001, to conduct a feasibility study for establishing a Strategic Petroleum Reserve (SPR).

The SPR consists of large stockpiles of crude oil as well as petroleum products, stored in facilities located around the country—and possibly overseas—that are released during periods of local or international oil supply disruptions.

The new DOE circular serves as the implementing guidelines for the establishment of the Philippine Strategic Petroleum Reserve Program (PSRP), with the PNOC and DOE jointly implementing the program.

Through the circular, the DOE seeks to establish a government-owned reserve of crude oil, finished petroleum products and biofuel reserve to enhance the security of fuel supply in the country. This would enable the government to address a severe international supply interruption or to implement the Targeted Fuel Relief Program.

Under the circular, the PNOC is tasked to acquire the necessary storage and blending capacity by construction, lease, or other acquisition options based on the agreed minimum and maximum volume level determined by the feasibility study and specified on the approved Guideline on securing storage and blending facility.

The storage and blending facility should be consistent with the supply contract and products portfolio.

In addition, it is the job of the PNOC to acquire the appropriate supply contracts and product type portfolio that allows it to secure the necessary volume to attain the objective of PSRP.

The approval of supply contracts and maintenance of product type portfolio should take into account the feasible and sustainable operation of the PSRP in the manner most economical and advantageous to the government.

PNOC is also responsible for establishing the competence to distribute products to the intended purpose of the PSRP, from the transport logistics down to the fuel discharge to the end-consumers.

The distribution chain may be done through lease or acquisition. To address immediate disaster or emergency response deployment, the PNOC should ensure the availability of Mobile Distribution Vehicle.

The circular mandates the DOE and PNOC to utilize the assistance of the existing Inter-Agency Contingency Committee (IECC) created by Administrative Order No. 6 in the implementation of the preparatory activities and the actual implementation of the PSRP.

The two agencies are also tasked with ensuring continuous engagement and participation with international commitments on oil stockpiling projects and initiatives. Such engagement includes consistent participation in training and meetings, joint studies and projects, and compliance to approved international agreements.

The new circular will take effect 15 days following its complete publication in two newspapers of general circulation.

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