Everything Under The Tropical Sun

I wrote about Philippine fuel costs last July 7, 2008. I was complaining how high it has gotten within a span of 2 months. At the time, diesel prices were at P55.26/liter ($1.23/liter) and at the time, I was in high hopes that maybe gassing up with biodiesel would be much cheaper for us. Only to find out that it wasn’t all it was cracked up to be. I also wrote about how jaded I felt after we gassed up with biodiesel.

Well, things are starting to look up. As you can see, there’s a huge drop in gas prices since. Now, the DOTC (Department of Transportation and Communications) announced that they’ll be reducing the public transportation fees before Christmas. That should more or less help the commuting public alleviate some of their budget woes.

The thing is, gas prices may have gone down P11.00 ($0.23) so far but it rose a total of P21.00 ($0.45). So there’s still about another P10 more to go before it equals to the original gas prices before the whole scarcity scare.

What I don’t get is that the crude oil prices per barrel has already dropped to an all time record low of $72/barrel when I remember that during the height of all of the fuel price increases, the price of crude per barrel was about $130/barrel. The drop is about half the price and how come they’re not dropping prices of retail fuel as fast as they brought it up???

Now they’re blaming it on the instability of the dollar. Whatever. If it’s not one thing it’s another. But I’m still glad that it’s been dropping. Just not all too happy about the speed. Now, if only other costs would go down as well like food prices, energy costs, etc…. but I guess that’s asking for too much now.

Okay, so I did some research on biofuels in the Philippines. Biodiesel is produced by extracting oil from plants.

The question in my mind while doing so was: Why is commercial biodiesel practically the same price as regular petroleum diesel?

I found out (with the help of my loving husband) that Flying V’s biodiesel blend is B1. Which means it contains only 1% coco biodiesel and 99% petroleum. Hence, the small price difference. So why only 1% you say? Good question. I’ve got an irritating answer (irritated because it makes complete sense):

Too many products are dependent on coconut supply like the food and cosmetics industries. Since coco biodiesel is a lucrative business (all the more at this point in time), the government is afraid that there might be a sudden shift in supply which would wreak havoc in the other industries dependent on coconuts. Just like what happened to Brazil in terms of their corn production due to ethanol demand. It makes sense that our government doesn’t want that to happen.

Though the World Wide Fuel Charter accepts blends of up to 5%, this must be done gradually. There is a law in place. In 2006, President Gloria Macapagal Arroyo, signed a law that makes it mandatory for fuel companies to use B1 blend (for diesel products) from the year 2009 onwards with increasing increments in the following years. She aims to reduce our dependence on imported petroleum by 3% in 2011.

Even with coco-diesel composing a mere 1% of the total biodiesel blend, it is said that it should be enough to help diesel engines to be fuel efficient thus, more mileage and is still a big help to the environment. These are good things but why do I still feel cheated? I mean, if they really want people to opt for biodiesel, shouldn’t they encourage them by bringing the price much lower? At least around P2.00 ($0.04/liter or $0.17/gallon) because despite the fact that coco-diesel is a NATURAL RESOURCE, it’s also tax-free.

I wrote early this week about attempting to fuel up with commercial biodiesel and we did.

I was quite disappointed. First, it’s because of the price. I was expecting the biodiesel to cost less than the regular biodiesel since our country has an abundant source of coconuts to be able to convert to fuel. It’s just basic economics. Less overhead expense since it’s a local product. Take the middle east for example. Their local fuel costs are about P5-P7/liter (that’s about $0.11 to $0.16/liter or $0.42 to $0.60/gallon). So what did we get? See below:

GRRRRR!!! It made me angry when I saw that. Made me so so…. UGH! Fine! I’ll say: curious. Made me so so curious and made me research on the web. I will write another blog entry to show how jaded I was with my country’s biodiesel laws and the actual practices in place.

Right now.. I’m ranting. Can’t believe how jaded I’ve become. I assumed too much. Grrrrrr… I will do my research now. I can’t take not knowing.

P.S.

Because of gas prices going up up up… Our capital city’s roads have 20% less vehicles. I guess Mother Nature has found an effective way to strike back.