Gov’t misses target to bring in ‘cheaper’ diesel

Even then, Cusi said in an interview there were at least two foreign companies that had signified intent to provide the supplies for the Department of Energy’s envisioned national strategic petroleum reserve.

“One (prospective supplier) is from Russia and another one is from the Middle East,” he said.

“PNOC-EC [the state-run Exploration Company] is the one engaged in talks,” Cusi said, “They (companies) have big volumes on offer, but this is actually a question of how much we can take.”

Pressed for details, the energy chief reiterated that PNOC-EC was still considering three possible locations where the stockpile might be kept.

Earlier this month, Cusi said these included Subic in Zambales), another depot in Quezon province, and industrial complex of Phividec (Philippine Veterans Investment Development Corp.) Industrial Authority in Misamis Oriental.

The first shipment was expected by the end of June.

A volume of 240,000 metric tons was mentioned, representing three days’ worth of consumption.

“There will be a slight delay,” Cusi said yesterday. “Actually the trajectory of prices is going down (recently), but we are being careful not to get any contract at high prices.”

In May, Malacañang officials said the Palace was considering to import fuel from countries that are not members of the Organization of Petroleum Exporting Countries such as Russia, as a means to alleviate what was then an upward trajectory of prices.

The apparent assumption was that Opec producers—widely regarded as a cartel —sell at high prices while non-Opec producers sell at lower prices.

But back then, Opec and non-OPEC countries including Russia were continuing efforts to raise prices through reduced output by way of an agreement made in late 2016.

Last week, Opec members and their non-Opec allies including Russia agreed to raise output by a million barrels daily, partly to address concerns of an overheating market and avoid sharp rises in prices. –Ronnel W. Domingo –