To secure the continuous supply of diesel in the country and in anticipation of supply disruptions in the world market, the government will start to stockpile on its diesel reserves befor the end of May.
According to PNOC-EC President Germiliano Lopez, the company will bring into the country by the next month a shipment of diesel fuel in the amount of 50 million liters at an estimated cost of P2.25 billion to be funded through trade financing.
The reserves will allow retailers to provide discounts to the transport sector in case of price spikes.
Diesel has been given priority because it is of critical importance to the transportation sector. An adequate supply will ensure price and supply stability amid shocks in the world market.
Stockpiling of oil reserves has been planned by the government since 2005 but has never been implemented, in contrast to neighbors in the region which have built up their reserves.
Diesel prices have gone up an average of P9.60 per liter since the start of the year.
Adapted from Business World Online , April 16, 2011