Saudi Arabia chairs Arab Economic and Social Council meeting in Cairo

Dubai: The UAE and Saudi Arabia have pledged to construct oil storage facilities in the Philippines, utilizing their own financial resources. This arrangement, disclosed during a Senate committee on energy hearing, aims to bolster Manila's capacity to address fuel supply disruptions. According to Department of Energy (DOE) oil industry management bureau director Rino Abad, Saudi Arabia will bear all expenses for the establishment of the storage hub.

Abad informed committee chairman senator Erwin Tulfo that the UAE also expressed a similar offer. The proposed facility would remain UAE-owned but could serve as a readily accessible source of petroleum products during emergencies. Philippine officials seek priority access to fuel during crises, ensuring a reserve that can be utilized when necessary.

The DOE has submitted a concept note to Saudi Arabia regarding the proposed storage hub, which could have a capacity of up to 50 million barrels. The Philippine strategic petroleum reserve team will continue discussions with Saudi Arabia to determine the next steps. The UAE is expected to be the next country approached by the Philippine government.

The UAE and Saudi Arabia have historically been among the Philippines' petroleum suppliers, providing export pipelines that offer alternative routes away from the Strait of Hormuz. This could provide Manila with a buffer against external shocks affecting fuel supplies and prices. Currently, the Philippines' strategic reserve, managed by the Philippine National Oil Co. (PNOC), is under development and targeted to be operational by next year.

However, its initial capacity of one million barrels would only cover slightly more than two days of Philippine demand. Philippine oil consumption stands at approximately 450,000 to 460,000 barrels per day. Senate chairman Erwin Tulfo has urged the DOE and PNOC to expedite the administrative requirements for the projects, emphasizing the need for adequate reserves to withstand external shocks in global petroleum markets.