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.