By Joann Villanueva
MANILA – Regulatory safeguards and market protection mechanisms remain in place to protect consumers in case erring power generation firms take advantage of the rising oil prices due to the conflict in the Middle East.
This was stressed by the Energy Regulatory Commission (ERC) on Friday, following a meeting with members of the Independent Electricity Market Operator of the Philippines (IEMOP) on Wednesday.
Citing IEMOP’s analysis, ERC, in a statement, said higher fuel cost may push prices in the Wholesale Electricity Spot Market (WESM) up.
“Price pressures may intensify under scenarios involving forced outages of large generating units, which could tighten supply,” it said.
ERC directed the IEMOP and the Market Operations Service (MOS) “to closely monitor market activities and promptly report any unusual or suspicious behavior in the market.”
“The directive aims to ensure that no participant abuses market power or takes advantage of prevailing market conditions, particularly during periods of heightened global fuel price volatility,” it said.
During the meeting, IEMOP members presented several scenarios on the possible impact of higher prices of international coal, oil and liquefied natural gas prices and possible supply constraints in the power system.
ERC Chairperson and Chief Executive Officer Francis Saturnino Juan said this move “is part of our proactive approach.”
“We conduct stress tests to understand possible risks early and ensure that consumer protection mechanisms are in place should global fuel volatility persist,” he said.
“Our priority is to protect consumers from undue price volatility while ensuring a stable and reliable power supply.”
Authorities and oil firms have yet to release possible price adjustments for next week, saying they still need to assess market developments this week.
This comes as oil prices, at least in the New York Mercantile Exchange (NYMEX), have breached the USD81 per barrel level.
Jetti Petroleum President Leo Bellas said in a Viber message to journalists on Friday that prices in the Mean of Platts Singapore (MOPS), the Asian benchmark for oil products, “jumped as markets were affected by crude shortages.”
“Asian refiners are struggling to secure prompt replacement crude cargos, with some Chinese refiners already cutting runs and suspending fuel exports, resulting to a reduced available supply in the region,” he said.
Bellas added that expectations of more refining run cuts could tighten fuel supplies further. (PNA)
