Biodiesel Industry Asks for Higher Fuel Blend

Thursday, February 22, 2018

Dean A. Lao, Jr., president of The Philippine Biodiesel Association, said rising diesel prices coupled with decline in coconut oil prices make this a good time to use more coconut-based biodiesel, known as coconut methyl ester (CME).  He said the latest Philippine Energy Plan (PEP) drafted by the Department of Energy (DoE) called for the increase in the percentage of biodiesel in blended diesel fuel to 5% from 2% by 2020, giving ample time for the industry to gradually adjust. 
“If the coconut oil supply continues to increase, and that’s caused by favorable weather, fertilization and better production,  the price will continue to fall, so the timing is getting better,” said Mr. Lao, who is also managing director of biodiesel processor Chemrez Technologies, Inc.  Aside from the rising prices of fuel on the international market, local diesel pump prices were further pulled up by the excise tax on fuel because of Republic Act 10963 also known as Tax Reform for Acceleration and Inclusion (TRAIN) law. 
Mr. Lao said that using a reference price of P35 per liter for diesel and P90 for biodiesel, which he said has recently dropped to P80, every percentage increase in the contribution of biodiesel to the blended fuel would add about P0.40-P0.45 per liter to pump prices. A yearly increase of P0.40-P45 per liter until 2020 might be the “smoothest way” implementing the PEP requirement, he said. “It can also be 5% in a sudden jump and they can be ahead of the Philippine Energy Plan,” he added. 

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