The LPG non-shortage

Tuesday, January 27, 2009
MST HOME
Exchange Rate
Closing: Jan. 26, 2009
Phisix
Closing: Jan. 26, 2009

Maybe Energy Secretary Angelo Reyes has a secret supply of cooking gas that no one knows about. After all, the government?s energy-sector boss seems to be the only remaining person in the Philippines who actually believes that there is no shortage of liquefied petroleum gas.

And, just maybe, Reyes is supplying Justice Secretary Raul Gonzalez with LPG, as well, because the justice chief is only too willing to take his Cabinet colleague?s word for it, that no shortage actually exists. ?There was this statement from the [energy] secretary that there was no crisis,? Gonzalez said in an interview, when asked why the National Bureau of Investigation or any other law-enforcement agency is looking into widespread reports of a severe lack of cooking gas.

If the energy secretary says there is no LPG shortage, to follow Gonzalez?s line of reasoning, then there can?t be one. And it won?t matter one whit if, in the real world, people still haven?t been able to purchase the fuel that cooks their food since the non-crisis began last month.

Aside from Reyes, his departmental flunkies and other occasional government officials like Gonzalez who make intermittent statements about the ?rumored? or ?reported? shortage (only to deny its existence in the next breath), no one else seems to care about this mundane problem. Never mind if none of these officials will be able?incognito, and without their official entourages, of course?to purchase an 11-kilo ?bottle? of LPG if their next meal depended on it like the rest of us.

Unfortunately, because Reyes, Gonzalez and other officials refuse to acknowledge the problem, we can?t even demand that President Arroyo designate herself ?LPG czar,? so she can personally deal with the situation. No shortage, no problem, right?

Of course, for the nth time, we hear from Reyes? department that the supply of liquefied petroleum gas will return to normal ?within a few days.? Or, like this statement from Oil Industry Management Bureau director Zenaida Monsada, who said over the weekend that, ?generally, the [LPG supply] situation has improved,? we have a tacit admission that the non-crisis will soon be over.

And then, we hear from industry players like the Liquefied Petroleum Gas Marketing Association, which said yesterday that the shortage will last until March, and that prices of LPG could go up by P5 per kilogram to reflect the tightness of supply. ?Tightness? is a wonderful term to use instead of ?crisis,? but neither will be able to cook your food, of course.

At times, though, you get the feeling that Reyes himself just might let the ?C? word slip, especially after he?s just come from one of those well-publicized visits of his to the oil companies? refineries and depots?where, predictably, he finds ?no shortage? of cooking gas. ?The problem is the shipments are arriving, but we don?t see [them] in the outlets where people can buy,? Reyes said after one such foray. ?The government is checking on this . . . to look at the entire supply chain from distributors to the outlets. [W]e will inspect storage facilities, refilling stations and dealers and see to it that nobody?s taking advantage.?

Close, but no cigar. And even if you had a cigar, you can?t light in on the gas-less stove.

* * *

The strange thing is, the LPG supply crisis did take place, according to the oil industry itself?the same industry that has convinced Reyes that it didn?t happen. When supplies started to become scarce last month, one oil company spokesman explained that the entire Asia-Pacific region was suffering from a shortage, which was due to several factors entirely beyond our control.

Shell spokesman Roberto Kanapi said traditional high sales during the winter months, when demand for heating increases, pushed up regional LPG prices in the final months of 2008. This spike in demand, together with lowered production because of refinery shutdowns in China and the Russia-Ukraine gas dispute, conspired to bring the prices of LPG to heightened levels late last year? ironically, as crude oil prices were falling all over the world because of the worldwide economic recession.

Later on, the Big Three oil firms, which supply most of the LPG in the local market, said they weren?t able to source enough cooking gas for their small retailers, because they had to give priority to big users, who had contracts to buy from them in bulk. That, they said, caused a temporary retail supply shortage of a scarce product in great demand?and which would probably cost more if and when adequate supplies arrived.

These announcements came simultaneously with the sudden disappearance of stocks in local gas retail stores, as well as at stations that sell LPG to thousands of taxis in Metro Manila that run on cooking gas. (The reason you don?t hear taxi operators complaining is because their units can run on both gasoline and LPG, and drivers load up on the fuel that is cheaper. Since gasoline prices have gone down and LPG can?t be found, the operators just use their usual gasoline.)

Reyes then began his peregrinations to oil depots and warehouses, where he found nothing unusual except for the ?delays? in delivery that the oil companies said were causing the shortages. That soon developed into declarations that there was in fact no shortage at all, since stocks were already arriving?and that?s the way things have gone on ever since.

Now, who?s looking out for the consumers, who have gone back to charcoal, firewood, electricity and anything else they can get their hands on to cook their meals? Consumer-rights advocate Raul Concepcion says the Department of Trade and Industry should be on the case, since the basic rights of consumers to cheap and available fuel is probably being violated by hoards and speculators of LPG.

But the trade secretary hasn?t made a statement about the non-crisis that we know of, so far. Which leads us to suspect that?like the justice secretary?he, too, may already be getting his LPG from Reyes? secret stash.

Ah, if only we could get some of that gas for our soot-blackened selves, too. Then we?ll know for sure that there isn?t really any LPG shortage, just like the energy secretary keeps telling us.