PHILIPPINE Energy officials are closely tracking global developments as oil markets reacted on Tuesday to rising tension in oil-producing countries in the Middle East and North Africa. This, as local oil companies also raised fuel prices effective Tuesday afternoon.
The Energy department said it is also preparing an oil contingency plan to safeguard the country from possible international supply disruptions.
“With the turmoil in the Middle East and oil-producing Arab countries, we expect an upward pressure on oil prices both internationally and domestically,” Energy Undersecretary Jose Layug Jr. told the BusinessMirror in a text message. The Energy official is in Riyadh, Saudi Arabia, for an international forum to discuss the current oil situation and outlook.
Oil prices soared above $93 a barrel on Tuesday in Asia as Libyan leader Moammar Gadhafi’s grip on power in the Opec nation weakened amid violent protests calling for his resignation.
Benchmark crude for March delivery was up $7.34 at $93.54 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange.
On Tuesday morning, local oil companies Chevron Philippines Inc., Pilipinas Shell Petroleum Corp. and Total (Philippines) Corp. increased their gasoline and diesel prices by P0.50 per liter, while Petron also increased their gasoline and diesel prices on Tuesday afternoon.
The Department of Energy (DOE) monitoring showed that the average price of Dubai crude increased by $5 to $98 a barrel this month from $93 per barrel in January.
The DOE added that the average price of Mean of Platts Singapore (Mops) unleaded gasoline has increased by $3 to $109 a barrel this month from $106 a barrel in January, while the average price of Mops-based diesel also increased by $8 to $117 a barrel this month from $109 a barrel in January.
The DOE, however, made it clear that the current unrest in the Middle East and North Africa is not seen to disrupt the local oil industry since the affected nations are not oil supply sources of the country.
“In 2010, our crude oil importations were sourced from Saudi [Arabia], UAE [United Arab Emirates], Qatar, Oman and Iran. The imports from the Middle East totaled 81 percent, while [from] the Asean 12 percent, and Russia 7 percent. Imported products were also mainly sourced from neighboring Asian countries, except for LPG where 40 percent came from the Middle East countries of Saudi, Qatar, UAE,” DOE said.
To address possible fuel supply problems, DOE said it has prepared an oil contingency plan for external supply disruptions, which is composed of three phases: the predict level, prepare level and perform level.
The DOE said these phases cover the spectrum of preparedness and response.
DOE explained that the predict level covers a precontingency scenario. Activities in this phase include coordinating and alerting government agencies on developments, monitoring and making up to date assessments of the situation.
In the prepare level, DOE said it will be undertaking preparatory activities in anticipation of a deteriorating situation to a higher level, such as supply diversification, building up of oil inventories and foreign exchange, and securing of energy facilities, while in the perform level, the implementation of fuel allocation, rationing and conservation schemes are included in the plan.
The DOE said it has also prepared the mechanism for use during periods of possible allocation, which is now being reviewed and fine tuned to be more relevant to present realities.
