DOE hits snags on analysis of oil firms’ inventories

After figuratively getting whacked on the head in a Senate hearing last week, Department of Energy (DOE) officials are still on “struggle mode” on their analysis of petroleum product inventories as well as on the examination of data submissions of the oil companies.

The latest faux pas of the DOE officials in this week’s meeting with the oil companies had been their manifest unfamiliarity of the nature of the downstream oil business – including that of gains and losses incurred on product costing through the chain – from crude products’ shipments to their refining; and up to the products’ passage through terminals and depots before they are retailed to customers at the pumps.

For instance, with oil refiners – when their crude shipments arrive, it may still take days before these could be processed at the refinery; and even more days after refining, that the finished products would have to travel through complex paths of marketing depots and terminals before they reach the retail pumps. Hence, the price of which the product shipment had been originally been sourced at, will already change at the time it reaches the gas station level.

The oil firms can just wish that the DOE officials would have ‘deep understanding’ of the industry’s complexities so they can thoroughly analyze and assess the oil inventories.

“How can they (DOE officials) even start analyzing data on inventories if they don’t know what are the basic facts they should be looking at,” an oil industry player has asserted.

The DOE has committed to Senate Committee on Energy Chairman Sherwin T. Gatchalian that analysis of the oil firms’ inventories and validation of costs’ pass-on at the gas pumps be completed by the end of the month.

To Energy Secretary Alfonso G. Cusi’s credit, he is reportedly cracking the whip on the concerned energy officials so they can present a thorough report and extensive validation whether or not the oil industry players have committed abuses in their enforcement of price increases relative to the implementation of excise taxes under the Tax Reform for Acceleration and Inclusion (TRAIN) Act.

The old stocks of the oil companies were not supposed to have been covered by the newly enforced TRAIN taxes, thus, the DOE will need to undertake thorough validation of their inventory numbers and costs’ pass-on to consumers

“The energy secretary wants everything unbundled and thoroughly explained, and we are also being pressed to work on a strict deadline,” an energy official privy to the discussion has indicated.

The energy official further pleaded for “public tolerance and understanding since this is the first time that we are doing this.”

On Wednesday (January 24), the energy department deployed teams anew to oil firm retail networks  “to validate imposition of excise tax on liquefied petroleum gas (LPG) products.”

The department noted that there had been “two DOE teams who will go around the stretch of Tomas Morato Avenue, Timog Avenue and E. Rodriguez Avenue fuel stations (in Quezon City) to inspect implementation of excise tax and prices of their LPG products.”


Velasco, M. M. (January 24, 2018). DOE hits snags on analysis of oil firms’ inventories. Manila Bulletin. Retrieved from

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