The Philippines' Department of Energy has urged the Manila city government to renew the permits of Petron Corp, Pilipinas Shell Petroleum Corp and Caltex Philippines Inc to operate in the Pandacan oil terminal.
A BusinessWorld report quotes energy secretary Vincent Perez as saying that the oil firms' continued operations in Pandacan is critical in ensuring the country's fuel security, particularly with the continued escalation of tensions between the US and Iraq.
The three oil firms' permit to operate in Pandacan lapsed recently.
Manila City Mayor Lito Atienza earlier said the three oil firms have failed to accelerate their commitments under a memorandum of understanding signed last year.
Under the deal, the three oil firms committed to "immediately" scale down their facilities in the depot area, following its reclassification into a commercial and recreational zone from its previous classification as an industrial area.
The move effectively required the removal of the oil firms' facilities from Pandacan.
However, concerns the move will affect fuel supply prompted negotiations for a phased scaledown.
Meanwhile, Petron and Pilipinas Shell said that they will import blending products to comply with the new gasoline standards under the Clear Air Act.
Energy Industry Administration Bureau (EIAB) director Zenaida Monsada said the implementation of stricter aromatics and benzene specifications beginning January 1 under the CAA should help curb smuggling of oil products into the country.
"We are using alkylates as blending agent. This is less expensive than importing the finished product," Petron corporate communications manager Virginia Ruivivar said.
She said that a decision was awaited from the Petron's board of directors regarding plans to put up the infrastructure to produce the CAA-compliant products.
Shell external affairs general manager Roberto Kanapi said the company has been bringing in blending components since the early part of December 2002.
"We believe this is more cost effective for the company," Kanapi said, but said that putting up vital facilities to process CAA-compliant gasoline is not part of Shell's medium-term plans.
