Velasco asks DOE to reconsider policy on Euro 2 sale order

On August 30, 2018, the Joint Congressional Oversight Committee on Bio-Fuels tackled the Department of Energy’s Department Order (DO) No. 2018-08-0012, which “directed the Philippine Downstream Oil Industry to Offer Euro II Compliant Diesel as a Fuel Option for the Transport and Industry Sector.” The supposed goal of the said department order is to help implement measures to address current rising inflation that burdens the Filipino public.

Marinduque Rep. Lord Allan Jay Q. Velasco, Co-chairperson of the Oversight Committee, pointed out that the Philippines has already phased out Euro-2 fuels more than two years ago and mandated the use of Euro-4 fuels as Euro-2 fuels has a negative effect on environment, peoples’ health and economy.

Velasco questioned DOE Director Rino Abad and Undersecretary Donato Marcos on how the department order was issued. Other stakeholders from the petroleum industry, transportation sector and clean air advocates also expressed their opposition. Although Rep. Velasco appreciates the avowed goal of the department order, he maintains that the DOE should have carefully studied the economic, health and environmental impact of the said DO in order to determine whether the desired benefits outweigh the expected negative effects.

Rep. Velasco fears that considering DOE’s failure to seriously consider the comments of the stakeholders in this regard, then any projected savings from using the Euro-2 fuels might just be eaten up by the rise in Euro-2 fuel prices due to the increased demand and/or increased expenses incurred by the Downstream Oil Industry in complying with the department order. Such expenses may ultimately be passed on to the consumers and exacerbate inflation, negating any benefits as a result. Moreover, this reversion to Euro 2 fuels raises other concerns of the Downstream Oil Industry such as logistics, product adulteration and smuggling.

Rep. Velasco questioned how the selling of Euro-2 fuels, which is 10 times more polluting than the current Euro-4, could still be considered to be in compliance with the country’s commitment to the Paris Agreements on Climate Change; the purpose of the Biofuels law which is reducing greenhouse gas emissions; the Philippine National Standard on fuels; the government’s Public Utility Vehicle Modernization Program which requires Euro4-compliant engines for modern jeepneys; the worldwide trend of going for cleaner fuels thus limiting the current supply of “dirtier” fuels.

Finally, Velasco remarked that from the language used in DO No. 2018-08-0012, it appeared that said Order is mandatory and not time-bounded, instead of being optional and temporary as claimed by the DOE officials. Hence, Rep. Velasco enjoined the DOE to go back to the drawing board, conduct meaningful consultations with all the stakeholders and requested for the suspension of said department order, pending its further review. Marinduquenews.com

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