ASEAN states working on fuel-sharing deal

ASEAN states working on fuel-sharing deal

This measure, through which ASEAN countries can provide petroleum supplies to neighbors facing shortages of at least 10 percent of their requirements, comes as the conflict in the Middle East continues to escalate.

Under the ASEAN Petroleum Security Agreement (APSA), a member could give a distress notice to the secretariat of the ASEAN Council on Petroleum of the occurrence of a “critical shortage” in its petroleum supply due to an emergency. PHOTO: PHILIPPINE DAILY INQUIRER

The Association of Southeast Asian Nations (Asean), which the Philippines currently chairs, will expedite the enforcement of an energy-sharing mechanism which will allow member states to support each other’s oil and gas needs during supply disruptions.

This measure, through which Asean countries can provide petroleum supplies to neighbors facing shortages of at least 10 percent of their requirement, comes as the conflict in the Middle East continues to escalate further.

In a press briefing following the 32nd Asean Economic Ministers’ (AEM) Retreat in Taguig City on Friday, Trade Undersecretary Allan Gepty said the AEMs agreed to hasten the completion of the Asean Petroleum Security Agreement (Apsa) ahead of this year’s summit in May.

Under Apsa, a member could give a distress notice to the secretariat of the Asean Council on Petroleum of the occurrence of a “critical shortage” in its petroleum supply due to an emergency.

Critical shortage happens when a country experiences a shortfall of at least 10 percent of its normal domestic requirement for a continuous period of at least 30 days.

Before requesting assistance from other Asean states, the distressed country shall implement short-term measures to reduce demand of its petroleum use, including demand restraint, fuel switching, price surge protection and information sharing.

Under Apsa’s Coordinated Emergency Response Measures, all member states shall endeavor to supply petroleum to the distressed country at the aggregate amount equal to 10 percent of its normal domestic requirement.

The terms and conditions of the sale of petroleum shall be negotiated among the parties “in the spirit of assistance and no undue advantage shall be taken by the Asean states.”

President Marcos earlier assured the public that the country has sufficient oil stockpiles to cover approximately 50 to 60 days of supply.

Specifically, the country’s available reserves cover diesel, which is sufficient for about 50.5 days; fuel oil and gasoline, each sufficient for about 51.5 days; kerosene, sufficient for around 67.5 days; jet fuel, sufficient for about 58 days; and liquefied petroleum gas, sufficient for around 29 days.

Voluntary basis

Sharing under Apsa, however, is done on a voluntary and commercial basis because these countries’ exports are often tied up in long-term commercial contracts. This means a distressed country such as the Philippines must still pay market rates which are currently spiked by the ongoing war.

Based on the Department of Energy-Oil Industry Management Bureau, petroleum product demand among the country’s different industries reached 184.5 million barrels in 2024.

Asean is highly vulnerable to Middle East tensions as most of its crude oil and a significant share of its liquefied natural gas are imported from that region.

Governments and businesses across Southeast Asia are scrambling to stave off energy shortages as the Strait of Hormuz remains shut to maritime traffic amid the Iran War.- (ANN/THE PHILIPPINE DAILY INQUIRER)

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