Oil Industry Saddled with High Inventory
Byline: MYRNA M. VELASCO
As a result of an earlier government mandate, the domestic oil industry is still plagued with an alltime high inventory level, reaching 86 days last week, thus, making it more difficult for them to implement abrupt drop in pump prices.
Of the existing level of inventory, 57 days are incountry crude and finished petroleum products; while 29 days are still in transit.
"Despite our move to relax the required minimum inventory level, we have very sufficient supply of oil, the highest in 10 years. Prices of oil both in the world and local market are now in the downtrend.
This should provide some comfort for us even in the face of reports of a prolonged war in the Middle East," said Energy Secretary Vicente S. Perez.
Before the start of the US-led war in Iraq, the Department of Energy (DoE) required the oil companies to beef up their inventories, to ensure that there would be sufficient oil supply in the country, even if the war would stretch over a longer period of time.
For refiners, they were asked to maintain minimum inventory of 30 days of crude supply; while the new players were required to have minimum 15 days of supply; and liquefied petroleum gas (LPG) supply should last for at least 7 days. …