MANILA, Philippines – The Department of Energy (DOE) should come up with a scheme where oil companies maintain 30-day reserve of fuel products as tensions in the Middle East continues to escalate, a lawmaker said on Sunday.
1-Pacman party-list Rep. Mikee Romero said that this is to shield people from the possible effects of impending oil price hikes, which may be brought by the United States and Iran conflict.
“I suggest now to the Department of Energy that they order, when the need arises, the local oil companies to raise all their fuel reserve inventories to at least 30 days,” Romero said in a statement.
“This executive action would be a temporary measure the DOE can do now and is different from what I have proposed in HB (House Bill No.) 4689 which is legislation,” he added.
Oil price monitoring firms have noted an over-four percent spike in crude oil prices, after the United States launched an airstrike in Baghdad, Iraq which killed popular Iranian general Qassem Soleimani.
Brent crude oil, seen as a reference point to other crude prices, rose to $69.16 per barrel while West Texas Intermediate (WTI) prices are at $63.84 per barrel.
The airstrike, ordered by US president Donald Trump, is seen to have other widespread economic and security repercussions in the already conflict-ridden region.
READ: Tensions high after US air attack kills top Iran general
Romero for his part reiterated his proposal to have a National Strategic Fuel Reserves. Under HB 4689, the government and the oil companies should separately keep a 15-day stockpile of various oil for basic fuel products like gasoline, diesel, kerosene, aviation fuel, bunker fuel, and liquified petroleum gas.
He also said that calls for the government to suspend the excise tax on fuel products, brought by the Tax Reform for Acceleration and Inclusion (TRAIN) law, may be acted upon if needed.
READ: Oil prices surge after US strike kills Iranian general
Groups have already speculated that oil prices will skyrocket with the string of incidents in the Middle East, coupled with the excise taxes. The additional taxes from the TRAIN law — geared to fund the administration’s infrastructure program — may bring increases of oil prices up to P7.
READ: Suspend excise taxes on fuel amid growing tensions in Middle East — labor group
Still, Romero — a businessman by profession — is confident that there would be no repeat of previous oil crises, just like those in the 1970s. He also called for a calm approach to the issue, as it may create anxiety among people.
READ: P7 per liter hike for diesel in 2020 if TRAIN law isn’t stopped — Bayan Muna
“Alarmist speculations only serve to create needless anxiety. I call for calm and reasoned observation. Given the current developments in Iraq and Iran, the proper stance is staying the course in our good relations and people-to-people ties with both Iraq and Iran,” he noted.
“While there may be historical parallels similarities between what is happening now with what was in the 1970s and 1980s, the similarities end there […] In fact, world oil prices have been stable,” he added.