With the heat of Summer and May local elections inflicting the Philippines right now, an added burden on the population could be the possibility of fuel prices going up further because of the implementation of the Biofuel Law on May 6, 2007. And that’s not even mentioning that world oil prices are already going up because of the election in Nigeria (Oil speculators are celebrating right now.) Last time I checked, not all the world’s oil is coming from Nigeria.
Philippine Oil producers are expected to mix 1% biodiesel in the diesel they sell at the pump as well as 5% ethanol in the petrol come May 6, 2007. According to Total, one of the local fuel merchants, the increase in fuel prices will depend on what price they can get with the biofuel suppliers since as a business they will pass on the added cost to the consumers. Incase local supply not being able to keep up with the demand, local oil refiners are allowed to import ethanol and biodiesel tax free from external sources.
I think this is just a short term problem that Filipino’s have to learn to grin and bear with while local production tries to ramp up to the demand. A lot of the potential biofuel investors were in a wait-and-see mode while waiting the outcome of the Biofuel Act of 2006, whether it was going to be passed or not, hence no definite signs of mass ethanol distilleries being set up on the countryside. If we take Ethanol as an example, it usually takes about a year for an ethanol distillery to be built. Application for operating permits however?, now that’s another question. So let’s assume it to be two years (with farm production going in parallel with the distillery construction) before we can start seeing some useful output of a distillery in the Philippines.
I would love for these assumptions to be proven wrong so that we can expect to see local supply hitting the pumps before 2009-2010. That way, money that will be used to import fuel will be kept within the country and hopefully improve the livelihood of local farmers and other down stream industries.
Article here
Category: Law, Asia
