SEN. Erwin Tulfo urged the Department of Energy (DOE) and the state-run Philippine National Oil Co. (PNOC) on Thursday to hasten the establishment of strategic petroleum reserves.
The stockpile, he said, should include storage hubs backed by Saudi Arabia and the United Arab Emirates (UAE).
This comes as the government seeks measures to cushion the country from supply disruptions and volatile global oil prices amid geopolitical tensions.
The DOE said it has been continuously monitoring the downstream oil industry since the outbreak of the war in February, adding it required oil companies to submit unbundled information on their importation and refining operations. The data, it said, are being used to assess and validate movements in gasoline and diesel prices.
DOE Director Rino Abad said the agency has created a Philippine Strategic Petroleum Reserve team and completed a concept note for the country’s proposed reserve system.
The concept note has been submitted to Japan’s Ministry of Economy, Trade and Industry for review, while a separate proposal has been submitted to Saudi Arabia, which is considering establishing an oil hub in the Philippines.
Under the Saudi proposal, the facility would be commercially operated but would give the Philippines a reserve right to petroleum products during emergencies.
Tulfo pressed the DOE to pursue a similar deal with the UAE, which he said had offered to finance and construct an oil storage depot in the Philippines.
Unlike the government’s planned facility, the UAE and Saudi projects would be funded by the two countries, with the Philippines receiving priority access to the stored fuel in the event of a supply crisis.
“It would be better if we had reserves,” Tulfo said.
PNOC Deputy Manager Antonio Buenviaje said the state-owned company would proceed with the construction of a 1-million-barrel storage facility in Bataan, regardless of whether the foreign-backed projects materialize.
Site preparation is expected to begin this year, with the facility targeted to be completed and operational within about a year and a half, he said.
The initial facility would have a capacity of 1 million barrels, but PNOC, he said, plans to expand the storage system to as much as 15 million barrels with the participation of other investors.
The DOE said the Philippines currently has no government-owned strategic petroleum reserve and instead relies on minimum inventory requirements imposed on private industry.
Abad said the country consumes about 450,000 to 460,000 barrels of petroleum products a day, meaning the initial 1-million-barrel government reserve would cover only about two days of consumption.
Saudi Arabia is considering a much larger facility, with a proposed capacity of up to 50 million barrels, with the Saudi government shouldering the cost, according to the DOE.
The UAE is also expected to submit or pursue a similar investment.
The DOE said Saudi Arabia and the UAE remain among the Philippines’ major crude oil suppliers and have established supply routes that can operate independently of the Strait of Hormuz, making them potential partners in strengthening the country’s energy security.
