Government eyes biofuel imports

The Department of Energy (DOE) is proposing the temporary importation of biofuels as part of efforts to cushion the impact of rising global oil prices triggered by supply uncertainties linked to the conflict in the Middle East.

Energy Secretary Sharon Garin, speaking during a Senate hearing on Wednesday, clarified that the proposal does not involve altering the mandated blending ratio of domestic fuel products since this is prohibited by law.

“The proposal is (to) allow it (importation) when the price is more than 5 percent of the pure fuel, pure gas, only to maximum of one year. Hopefully it will be shorter,” Garin said.

She noted that under Republic Act No. 9367, or the Biofuels Act of 2006, biofuel imports are generally allowed only after local supply has been fully exhausted.

Garin said the country’s current domestic supply remains sufficient but may only last until the end of April, prompting the agency to consider additional contingency measures.

The DOE is also maintaining close coordination with industry stakeholders to ensure adequate fuel supply in the country.

However, Garin warned that global supply risks remain high due to the volatile situation in the Strait of Hormuz, a key route for oil shipments from the Middle East to the rest of the world.

She added that the regional tensions have already pushed up insurance and transportation costs for fuel shipments.

“So, on the supply side, Madam Chair, what we are attempting with this proposal is, if anything happens, we can extend by adding more biofuels coming in the Philippines… If it’s 10 percent or 20 percent, at least we can extend it for 10 percent more of the time,” she said.

“And then on the price point currently, it’s inevitable the price of fuel, the pump price, will go up. One possibility that we could also temper that sharp increase is having more biofuel, especially on gas, not on diesel, but on gas,” she added.

The DOE has been studying several measures to mitigate the possible effects of the Middle East conflict on domestic fuel supply and prices.

Among these are public calls for energy conservation, including reducing electricity consumption and encouraging carpooling to help lower overall fuel demand.