Manila pushes for national law on energy conservation, efficiency

Singapore (Platts)--18Aug2005

Top level economic managers in Philippine president Gloria Arroyo-Macapagal's
administration have prescribed the country return to an energy law of the
1980s to lessen the impact of rising oil prices on the economy and maintain
its fragile foreign exchange reserve levels, a statement from the energy
department said Thursday. The Batas Pambasana Bilang 73 law of the 1980s,
which mandated energy conservation and efficiency, gave the government the
authority to allocate and ration oil distribution, mandated the labor
department to stagger working hours and the trade department to limit or fix
the operating hours of businesses and entertainment establishments. "We need a
law that will prescribe mandatory measures to further promote energy
conservation as was the case in the 1980s through Batas Pambansa Bilang 73
given the extreme volatility in oil prices," energy secretary Raphael PM
Lotilla said. "The said law, however, should only be implemented in a limited
period to address the extraordinarily high prices."

The Philippines relies on imports to meet its daily crude demand of around
350,000 b/d. The country's oil import bill for the first five months of the
year rose by 27% to $2.3-bil despite an 8% decline in oil demand. The
government emphasized that as a net importer, the country is not spared from
the negative effects of the runaway increase in oil prices and also urged
citizens to start conserving fuel voluntarily. Meanwhile, Arroyo has put in
place an administrative order mandating all government agencies to cut their
transport fuel consumption by 10% by limiting the use of government vehicles,
aircraft and watercraft for official use. The transport sector accounts for a
bulk 58% of the country's total oil consumption. The DOE is also aggressively
trying to push the public and oil companies to start using alternative fuels
such as coco biodiesel, ethanol-blended gasoline and natural gas for vehicles.

Coco biodiesel is currently the only alternative fuel available in the
Philippines though several independent players have indicated plans to import
ethanol following the government's decision last month to slash ethanol import
tariffs from 10% to 1%. Meanwhile, the Department of Energy is set to sign a
memorandum of agreement with oil industry players on Friday to support the
government's energy conservation efforts by reducing of operation hours of
gasoline stations, Lotilla said.

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