Oil player sees P1/liter drop in gas prices if ethanol is sourced locally
Thursday, February 01, 2007
By MYRNA M. VELASCO
Oil player Seaoil Petroleum is eyeing a P1.00 per liter drop in gasoline prices once ethanol supply becomes available locally.
Seaoil president Glen Yu said gasoline with 10 percent ethanol blend is just cheaper by P0.50 per liter now as compared to the prevailing prices; but there would be additional P0.50 per liter cut upon commercial operation of local production facilities.
The newly-signed Biofuels Act mandates initial 5.0 percent ethanol blend to gasoline products in 2009; and this will be increased to 10 percent after two years.
"We expect ethanol prices to go down by P1.00 per liter once we can source the product locally," the oil firm executive stressed.
Yu explained that freight cost accounts for a significant component in the cost of imported ethanol products and this is reflected as add-on cost at the pumps.
It would be noted that Seaoil was the first company to jumpstart sale of ethanol-blended gasoline in the market; even way ahead of the major oil firms.
With the law’s mandate, the company along with partners, has already planned of putting up an ethanol facility with capacity of 100,000 liters per day primarily to cater to their needs.
At this stage, he said the price reduction was due to the value added tax (VAT) zero-rated privilege provided for biofuels under the law.
posted by philpower @ 1:39 PM,
