DOE: MOPS is benchmark for local fuel products

An August 17, 2011 press release from the Department of Energy

The Department of Energy (DOE) would like to reiterate that the Philippines is using Mean of Platts Singapore (MOPS) as the benchmark for local fuel products which, has a different price movement compared to that of the West Texas Interchange (WTI) crude.

“International prices are no longer behaving simultaneously. Realities in a certain geography is causing a divulgence of prices.” Energy Secretary Jose Rene D. Almendras said.

MOPS is the daily average of all trading transactions of diesel and gasoline as assessed and summarized by Standard and Poor’s Platts, a Singapore-based market wire service.

As repeatedly explained since November 2010, and as part of its efforts to ensure transparency in oil prices in the Philippines, the DOE has been using the Energy Regulatory Board (ERB) formula since 1998 as a barometer to determine propriety of weekly oil price increases in the Philippines. The constituent element of the ERB formula is the average weekly MOPS price for unleaded gasoline and automotive diesel oil as the benchmark for finished petroleum products in Asia. Furthermore, there are only two refiners in the country, and they are importing not just crude oil but finished products as well to meet their own demand. All the other players in the downstream oil industry, who import finished products, use MOPS as benchmark for their pricing. Dubai price, on the other hand, is a benchmark used by different Asian countries for crude oil.

To date, the movement of the prices at the pump is consistent with the ERB formula.  Rest assured, the DOE has been closely monitoring actual oil price movements, both in the international and domestic market, to prevent unreasonable adjustments and abuses.

In an effort to cushion the impact of international oil prices to local consumers, the Department of Energy (DOE) is ramping up its efforts in raising awareness toward efficient use of gasoline and diesel to cushion the impact of rising fuel prices.

“We have to keep in mind that oil is a finite source and is expected to become more expensive as it nears depletion, which is not far from happening.” Sec. Almendras said.

In line with this, the DOE intensifies its advocacy of energy efficiency and conservation, as well as the promotion of the use alternative fuels for transportation—along with other agencies and stakeholders, the department is finalizing the Alternative Fuels Roadmap, the flagship program designed to diversify the fuel mix of the transport sector.

Under the Roadmap, the DOE is set to convert 200 diesel-run public utility buses to use compressed natural gas; convert diesel-run public utility jeepneys to use liquefied petroleum gas; and continue to implement the use of the 10-percent ethanol blend on gasoline pursuant to the Biofuels Act of 2006.