DOE: Import of diesel from Russia won't quickly lower PH oil prices

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Metro Manila (CNN Philippines, May 31) — The Department of Energy said Thursday the importation of cheaper diesel from Russia would not have an immediate effect on the country's oil prices, with supply not expected to arrive until after at least six months.

"Kung process ang pinag-uusapan natin, hindi siya immediate," Energy Undersecretary Wimpy Fuentebella said in Malacañang.

[Translation: If we're talking about process, it's not immediate.]

Fuentebella cited the government importation process is new and requires further study.

"Hindi ito negosyo, ito ay energy security function. So andoon 'yung anggulo ng pakikipag-usap," he explained.

[Translation: This is not a business; this is an energy security function. So we are in discussion.]

The Philippine National Oil Company Exploration Corporation (PNOC-EC) began the importation process, Fuentebella said. He also explained that a storage facility for the expected supply has been secured.

The country imported Russian oil amid rising oil prices in the Philippines. However, Fuentebella explained the imported supply will not be immediately rolled out to retailers.

When asked how many barrels are expected to come in, Fuentebella did not have an exact answer. However, the DOE hopes the cheaper supply comes in six months.

He added the country is also considering time as a factor, as global market prices of oil fluctuate.

"For prices, it moves up and down, there are other mitigating measures that I have mentioned, but we do not wish for a miracle na mangyayari 'to immediately," he explained.

Some of the mitigating measures include the fuel price subsidy in partnership with the Department of Transportation (DOTr) and the monitoring of oil retail prices alongside the Department of Justice (DOJ), to ease the burden on consumers.

"Gumagalaw ang Department of Energy para maisiguro na 'yung mga presyo na bumabagsak sa ating mga retail stations ay patas," Fuentebella said.

[Translation: The Department of Energy is moving to ensure that prices in our retail stations are fair.]

Meanwhile, Fuentebella explains DOE is actively looking for options to augment the oil supply in the country.

"We are exploring all options," he said. "We want to have more options available already."

He added that the Philippines is also coordinating with other countries such as Thailand, as the country moves to import oil from sources outside of the Organization of the Petroleum Exporting Countries (OPEC).

Global oil prices surged to their highest level in over three years last week, but prices are now slumping due to an increase in U.S. crude oil inventories and reports OPEC and Russia might start producing more.

Local commodity prices have been affected by the price rise as well as the fuel excise tax implemented by the Tax Reform for Acceleration and Inclusion (TRAIN) law this year.