MANILA – The Department of Energy (DOE) told oil companies to sell a cheaper but dirtier type of diesel oil to motorists to fight inflation – backing away from a two-year-old regulation that banned its use to improve air quality.
The DOE’s plan would need clearance from the Department of Environment and Natural Resources, which implemented the switch to the cleaner Euro-IV compliant fuels from Euro-II in January 2016, a rule that covered both oil companies and car manufacturers.
The Environment department was evaluating the plan, an official said.
Euro-II-compliant automotive diesel oil should be provided as a fuel option for transport and industrial retail customers “for the purpose of reducing the impact of rising petroleum prices in the world market,” the DOE has directed late Aug. 9.
“We’re studying it right now, giving consideration to their plan to cushion inflation,” DENR undersecretary Jonas Leones said. “We’re also looking at the implications for emissions.”
Euro-IV fuels have sulphur content of 50 parts per million (ppm) versus 500 ppm for Euro-II fuels.
Petron Corp., the country’s top refiner, was studying the impact of the Energy department’s plan, which it received only on Thursday night, a spokesman for the company said.
Pilipinas Shell Petroleum Corp., the local unit of Royal Dutch Shell PLC, was checking into the matter, said a spokeswoman.
Annual inflation in the Philippines climbed to its highest in more than five years at 5.7 percent in July, prompting the Bangko Sentral ng Pilipinas to raise interest rates for a third time this year on Aug. 9.
Along with the switch back to Euro II-fuels, Energy secretary Alfonso Cusi also ordered the government’s Philippine National Oil Company – Exploration Corp. to import “low-priced petroleum products, particularly diesel, to mitigate the impact of volatile oil prices.” (Reuters)
