Philippines: SRA nixes independent oil players' call for more ethanol imports

Philippines: SRA nixes independent oil players' call for more ethanol
imports

Despite rising fuel prices, the state-run Sugar Regulatory Administration
(SRA) has dismissed calls by independent oil players to allow increased
imports of ethanol products to effectively lower gas pump prices.

Rosemarie Gumera, planning and policy manager at the SRA, stressed that
under the government's bioethanol program, oil companies should prioritize
the procurement and development of the local ethanol sector to reduce the
country's reliance on imported fossil fuel.

"It is unfair for them to say that gas pump prices were affected by local
ethanol prices," Gumera told reporters over the weekend.

The official was reacting to reports that the Independent Petroleum
Producers Association (IPPCA) was pushing for 100 percent imported ethanol
as such a move could reportedly slash petroleum pump prices by as much as P4
per liter.

The oil firms reportedly claimed that sugar-based ethanol, which comprises
majority of the feedstock in the country, was more expensive than imported
corn-based biofuel.

"Hindi iyan ang intention ng bioethanol program eh [but rather]to develop
the local industry. If you import 100 percent, made-defeat ang purpose [That
is not the intention of the bioethanol program, but rather to develop the
local industry. If you import 100 percent, you will defeat the purpose],"
Gumera said.

"Importation of ethanol was never the intention of the program but just to
supplement the deficit of the local supply," she added.

The official said that since the start of the bioethanol program, over P20
billion worth of investments have been injected to the economy.

"In a way, the bioethanol program, nakakatulong na sa economy [is already
contributing to the economy]," she said, stressing that investments in
biofuels, ethanol and other allied trades continue to make for a more
resilient sugarcane industry.

In a report dated August 24, 2016, the United States Department of
Agriculture said that the Philippines' ethanol production is expected to
increase through 2017 due to a modest buildup in capacity. As a result, the
country's ethanol imports are expected to decline.

"Imports are expected to decline from 311 million liters (MLi) in 2015 to
281 MLi in 2016, declining again to 278 MLi in 2017," the USDA report said.

In 2015, there were eight ethanol plants operating in the Philippines with a
combined capacity of 222 MLi, according to Department of Energy data.
Production output increased 46 percent to 168 MLi in 2015, compared to 115
MLi in 2014.

The USDA said in the same report that "meeting the 10 percent ethanol blend
remains problematic," adding that the Philippines will remain a net
importer.

The Philippines' Biofuels Law mandates the use of E10 blended gasoline in
the market, which contains 10-percent ethanol.

Gumera, however, said that they expect local ethanol production to meet at
least half of the mandated biofuel mix once two more distillers-Cavite
Biofuels and Pro-Green, formerly Emperador Distillery-start operations by
next year.

Once online, the distillers are expected to narrow the gap in the country's
compliance with the ethanol mandate, which remains hounded by raw supply
availability and price volatility.

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Link to Original Article:
http://www.manilatimes.net/sra-nixes-independent-oil-players-call-ethanol-im
ports/301214/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com