The downstream oil industry has sustained a modest growth seven years after deregulation. As of December 2005, there are 601 players engaged in the different downstream activities of the oil industry, which was a 66.0 percent increase from the 361, count recorded in 2004. Likewise, the total investments of new players stood at PhP 28.40 billion as of December 2005. This is a 14.0 percent upsurge in level of investment from PhP 25.0 billion in 2004.

On the other hand, the total market share of new players decreased from 14.0 percent in 2003 to 12.0 percent in 2004. The accelerated investments resulted in the increase in market share of the new players to 15.3 percent in December 2005. Meanwhile, their participation in the LPG sector was kept steady to a high of 43.1 percent in 2004 and rose to 44.5 percent in 2005.

As of December 2005, the industry has recorded a total of 3,369 gasoline stations, with almost 67.0 percent located in Luzon, 15.0 percent in Visayas and 18.0 percent in Mindanao. Most of the gasoline stations constructed by the new players are located in Luzon and a few in Mindanao (Table 2). Competition in the petroleum retail industry is actually a numbers game. The company that has more outlets has the ability to capture greater share of the total Philippine market. As of end-2005, a total of 506 gas stations were put up by the new players.

On the other hand, the country has a total storage capacity of 26 MMB or 25,869.0MB (Table 3).

Government is steadfast in its position of maintaining the status quo and giving deregulation a chance, thereby letting market forces determine the fate of the industry. Indeed, prices are higher than it was prior to deregulation, but considering present conditions it is fair and actually lower than is expected under a regulated environment.

There are other programs of government which indirectly address the problems confronting the oil industry – programs that will take a longer time to implement but will have a far greater impact on energy development.

As a net importer of crude oil and finished products, the country is not insulated from the intermittent global oil price increases. Yet the government remains vigilant in averting its impact to the national economy. Several mitigating measures have been implemented.

When world oil prices hit all-time highs and consequently impacted on local oil prices, the DOE successfully implored the cooperation of the local oil firms to increase prices on a staggered basis rather than carry out a one-shot increase. Another is the provision of a one Peso discount on diesel for Public Utility Jeepneys (PUJs) and Public Utility Buses (PUBs) and scaled tariff reductions thus saving government from oil subsidies. From 366 stations in December 2005, there are now 602 participating stations nationwide. The President had also signed Executive Order 527 last May 12, 2006, temporarily reducing the import tariff on crude oil and petroleum products.

Lastly, the increased utilization of indigenous energy sources has enhanced the country’s energy self-sufficiency level of up to 54 % in 2005 from 51% in 2002 and 46% in 2001. In 1973, the country was 92% dependent on oil for its energy needs.