PRICES of petroleum products are likely to increase when the oil depot in Pandacan, Manila is shut down after the Supreme Court ordered the country’s top oil companies to relocate their storage facilities.
This was the fear expressed by Energy Secretary Carlos Jericho Petilla after the High Court, in a 10-2 vote, struck down as unconstitutional Ordinance 8187 of the City of Manila which was enacted during the administration of former Mayor Alfredo Lim.
The ordinance had provided for the continued stay and operation of oil the depot at the 33-hectare compound in Pandacan district.
The SC also ordered the relocation and transfer of the oil terminals of Pilipinas Shell Petroleum Corp., Petron Corp. and Chevron Philippines Inc. out of the Pandacan area .
In explaining the decision, Supreme Court public information chief
Theodore Te said “the continued stay of the oil depots placed the residents of Manila in danger of being terrorist targets.”
Petilla said that when the depot is shut down, the major oil players will have to get their supply from other facilities outside Metro Manila which would mean added delivery costs.
“If the Pandacan oil depot will be totally shutdown, oil firms will get their supply from Batangas. The only implication is that there will be delivery cost,” he said.
The energy chief, however, said the major oil companies would avoid increasing their prices too much due to competition in the market.
“How much is the increase, I don’t know. But it’s also a free market. If you will increase too much, nobody would buy from you. It’s a competition,” he added.
Petilla said the SC decision will pose problems for the oil firms on the transport of fuel supply from either Bataan or Batangas to Metro Manila.
“Basically, it will simply be a challenge for them because there is the logistics problem of transporting. That’s all it is for now,” he said.
The Supreme Court gave the companies 45 days to submit to the Manila Regional Trial Court Branch 39 a “comprehensive plan and relocation schedule.”
Both Petron and Shell said they will abide with the SC decision.
“Petron respects and will abide with the Supreme Court’s decision to cease operation of the Pandacan Terminal,” the company said in a text message.
Petron said it has been building storage facilities in Rosario, Cavite; Navotas; Harbour Center at the Manila North Harbor; and Limay, Bataan so that it would be totally out of the Pandacan depot by January 2016. Shell, for its part, said it still needs to see the decision of the SC before taking any action.
“We have yet to receive the court order to enable us to comment further. Rest assured that Shell will observe the rule of law and good governance,” said Shell.
According to Chevron, it has stopped using its oil terminal in Pandacan as early as June this year. The oil firms involved have 15 days to file a motion for reconsideration.