Energy
0

Philippines to Authorize Selling Cheap, Dirtier Fuel

Philippines to Authorize Selling Cheap, Dirtier FuelPhilippines to Authorize Selling Cheap, Dirtier Fuel

The Philippines is trying to curb its inflation running at five-year highs by ordering companies to make available for sale cheaper but dirtier fuel, backtracking on a ban on such fuels introduced two years ago for improving air quality. Philippines’ Energy Secretary Alfonso Cusi is taking steps to address slowing economic growth and high commodity prices by telling companies to sell low-cost fuels, and the government-owned Philippine National Oil Company-Exploration Corporation to import low-priced fuel, the energy ministry was quoted as saying by Oil Price.

“For the purpose of reducing the impact of rising petroleum prices in the world market, all industry players are hereby directed to provide at the retail level Euro-II compliant automotive diesel oil as a fuel option for transport and industrial customers,” it added.

The Philippines switched to Euro-IV compliant fuels in January 2016, replacing the Euro-II standard, which allowed for much higher sulfur content in diesel.

Euro-IV compliant fuels have sulfur content of 50 parts per million, compared to 500 ppm for Euro-II fuels.

The energy ministry’s plan, however, now needs to be approved by the environment department.

“We are studying it right now, giving consideration to their plan to cushion inflation. We’re also looking at the implications for emissions,” Jonas Leones, undersecretary at the Environment and Natural Resources Department, told Reuters on Friday.

On Thursday, the Philippines’s central bank raised again the key interest rate, by 50 basis points to 4%—the third such increase this year following rate hikes in May and in June.

The August rate decision was widely expected, with all 19 analysts polled by Reuters forecasting a rate hike. Inflation in the Philippines jumped to an annual rate of 5.7% in July, up from 5.2% in June.  Economic growth, on the other hand, slowed down to 6% in the second quarter—nearly a three-year-low and below analyst expectations of 6.7% growth.

 

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com