MANILA, Philippines – The Department of Energy (DOE) on Tuesday directed oil companies to ensure they have enough supply amid rising fuel prices.
In a statement, Energy Secretary Alfonso Cusi reminded oil firms to make sure they comply with the Minimum Inventory Requirements (MIR) amid the global oil supply outlook for the fourth quarter of the year.
“I am directing all oil companies in the country to ensure adequate supply, and come up with plans to mitigate possible price hikes of oil products in the coming months,” he said.
Citing Department Circular No. 2003-01-001, the DOE said that all oil companies and bulk suppliers are required to maintain a minimum inventory equivalent to 15-days worth of petroleum products’ supply, except for liquefied petroleum gas (LPG) which has a minimum inventory at 7 days.
Refiners, meanwhile, are required to maintain MIR equivalent to 30-days worth of supply, consisting of petroleum crude oil and refined petroleum products.
The DOE said that the latest global oil market developments are responsible for looming oil price increases.
It also said that aggressive demand in the fourth quarter is seen to reach as much as 103 million barrels of crude oil per day (mbpd), when supply is currently only at about 103.22 mbpd.
The department also noted the absence of any additional supply from the Organization of the Petroleum Exporting Countries (OPEC).
“From August to December 2021, OPEC will only be enforcing a 400,000 barrel-increase per month, which is, however, expected to even out the supply-demand balance by the end of 2021,” it added.
The DOE also noted geopolitical events that may continue to affect supply while demand is seen to pick up by the fourth quarter of 2021 due to increased economic activity as first world countries continue to post high vaccination rates.
“The DOE will continue to closely monitor global oil supply and price movements,” Cusi said.