By Vince Angelo C. Ferreras, September 19 2019; Business World
Image Credit to Rappler
A LEGISLATOR filed a bill Thursday calling for the creation of a strategic reserve for petroleum products, to cushion the impact of oil price and supply shocks.
“A national strategic fuel reserve will enable the government to protect Filipino consumers from (oil price) shocks… and resulting rate increases of public utilities… as well as supply disruption results from natural disasters and calamities, 1-Pacman Party-list Rep. Michael L. Romero said in a statement.
Mr. Romero filed House Bill 4689, which if approved will become the Philippine Fuel Reserve and Fuel Price Stabilization Act of 2019.
The measure proposes a government-owned strategic reserve with a minimum 15-day supply of liquefied petroleum gas, natural gas, diesel, gasoline, kerosene, aviation fuel, and bunker fuel.
The private sector will also be required to maintain a 15-day stockpile of these fuels as well as crude oil.
The proposed source of supply is government-to-government agreements with petroleum-producing countries.
The bill also proposes the designation of priority users in the event of restricted supply, which includes hospitals and social service care facilities, water distributors, sewage and water filtration systems, power generators, airports and seaports, schools, media organizations such as newspapers, radio and television networks; and other communications facilities.
“Perhaps as an incentive, the stocks in the fuel reserves can be exempted from excise or value-added taxes. This would make maintaining those reserves financially viable because there are inventory costs to offset,” he said.
Asked to comment, Energy Secretary Alfonso G. Cusi said the measure complements DoE’s current plans.
“DoE has a program to develop a strategic reserve… (The bill) will complement it, that will institutionalize it,” said Mr. Cusi in a chance interview with BusinessWorld. — Vince Angelo C. Ferreras