DOE issues stricter rules on LPG to ensure supply

The Department of Energy is imposing stricter rules for the liquefied petroleum gas (LPG) industry through the issuance of a Department Circular (DC 2014-01-0001) requiring LPG industry players to secure a Standard Compliance Certificate (SCC).

lpg
Photo from made-in-china.com
As provided in the DC, all importers, suppliers, refiners, refillers, marketers, distributors, haulers/transporters, handlers, storers, retailers, sellers and dealers of LPG must have an SCC to be able to transact/sell with other LPG industry players and consumers.

This circular will serve as a safeguard for LPG customers as it will discourage those who are illegally selling LPG without proper clearances. The SCC also encourages refillers to contract a portion of their requirements to secure their supply and avoid supply uncertainty. Violators of the said DC will be sanctioned with administrative charges and fines by the DOE. All existing LPG establishments shall be given three months from the effectivity of the Circular (http://www.doe.gov.ph/issuances/department-circular/2271-dc2014-01-0001) to fully comply with the rules.

Meanwhile, the DOE notes that the decision not to include the Shell Gas Eastern Inc. (SGEI) facility in the sale of Shell’s domestic LPG business to Isla Gas, and its decommissioning since November 2013, will only have an isolated effect to the independent refillers and marketers, specifically in Southern Luzon. The DOE emphasizes that the supply in the country is sufficient, including in Southern Luzon, but there may be logistical challenge for some LPG marketers and refillers in area.

“There is sufficient supply of LPG in the entire country despite some companies’ divestment in the LPG industry, which is, as we understand are business decisions.” Energy Secretary Carlos Jericho L. Petilla said.

The DOE further notes that Solane has already contracted its requirements with Liquigaz in Bataan to fill the supply gap due to the SGEI facility closure. On the fear of a consequent congestion of trucks (long queues) at the Bataan terminal, Isla Gaz has informed DOE that some of their contracted volumes with Liquigaz will be dispensed through tankers & barges to other LPG outposts/depots.

The DOE continues to implement its monitoring and close coordination with industry players to ensure sufficient supply in the market.

The DOE finally notes that if the international price of LPG is lower for February compared to January, then a corresponding rollback in the domestic prices of LPG should be implemented next week.

In 1998, Republic Act of 8479, otherwise known as Oil Deregulation Law, was enacted to liberalize and deregulate the downstream oil industry of the country to encourage fair market competition.