MANILA: The Philippines鈥� energy ministry has told oil companies to sell a cheaper but dirtier type of diesel oil to motorists to fight inflation, backing away from a two-year-old regulation that banned its use to improve air quality.
The energy department鈥檚 plan would need clearance from the environment department, which implemented Manila鈥檚 switch to cleaner Euro-IV compliant fuels from Euro-II in January 2016, a rule that covered both oil companies and car manufacturers. The department was evaluating the plan, an official said.
The Department of Energy late on Thursday directed that Euro-II compliant automotive diesel oil should be provided as a fuel option for transport and industrial retail customers 鈥渇or the purpose of reducing the impact of rising petroleum prices in the world market.鈥�
鈥淲e鈥檙e studying it right now, giving consideration to their plan to cushion inflation. We鈥檙e also looking at the implications for emissions,鈥� Environment and Natural Resources Undersecretary Jonas Leones told Reuters on Friday.
Euro-IV fuels have sulfur content of 50 parts per million (ppm) versus 500 ppm for Euro-II fuels.
Petron Corp, the Philippines鈥� top refiner, was studying the impact of the energy department鈥檚 plan which it only received on Thursday night, a spokesman for the company said. Pilipinas Shell Petroleum Corp, the local unit of Royal Dutch Shell PLC, was checking into the matter, a spokeswoman said.
Philippine annual inflation climbed to its highest in more than five years at 5.7 percent in July, prompting the central bank to raise interest rates for a third time this year on Thursday.
Along with the switch back to Euro II-fuels, Energy Secretary Alfonso Cusi also ordered the government鈥檚 Philippine National Oil Company-Exploration Corp. to import 鈥渓ow-priced petroleum products, particularly diesel, to mitigate the impact of volatile oil prices.鈥�