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Philippine Daily Inquirer: Shell to appeal SC decision on Pandacan depot

By Abigail L. Ho
Philippine Daily Inquirer
First Posted 15:56:00 02/14/2008

MANILA, Philippines — Oil refiner Pilipinas Shell Petroleum Corp. will appeal the Supreme Court’s decision upholding a Manila city ordinance ordering the relocation of the Pandacan Oil Depot by 2013.

“Shell will appeal to the Supreme Court, with the end in view of ensuring continued safe and secure fuel supply. The closure of Pandacan will result in a tight supply situation and supply disruptions are to be expected,” the oil firm said in a statement issued late Wednesday.

The Pandacan Depot currently supplies around half of the country’s total fuel demand and 100 percent of lubricant requirements, not only of the transport sector, but also of the industrial sector.

Industry data show that more than 1,800 retail stations in Regions 1-4, around 500 of these in Metro Manila, get their fuel supply from the Pandacan terminal.

The depot likewise serves 70 percent of the shipping industry’s fuel needs and 75 percent of aviation fuel requirements.

From the Pandacan depot, close to 200 million liters of jet fuel is supplied to the Ninoy Aquino International Airport and around 7.5 million liters of fuel is distributed to the Manila Port Area.

It likewise provides 45 percent of chemical needs nationwide, including those of strategic industries.

Shell said it would “offer the Department of Energy its full cooperation and will do its best to look at best options to ensure customers a steady supply of fuel and lubricants.”

Right now, however, Pandacan remained the most viable option, considering its strategic location, the firm said.

Shell said moving the depot out of Manila would mean more trucks on the road as fuel would have to be hauled longer distances to get to the demand centers.

The Supreme Court on Wednesday denied the motion filed by Shell, Petron Corp. and Chevron Philippines Inc., for a reconsideration of the March 7, 2007 decision ordering then Manila mayor Jose “Lito” Atienza to immediately enforce Ordinance No. 8027.

City Ordinance No. 8027 threatened to evict the oil majors from Pandacan as it provided for the reclassification of the oil depot’s location into a commercial from an industrial zone.

It took effect on April 30, 2003.

To prevent the total closure of the depot, the oil firms signed an agreement with the Manila city government to scale down its operations there as well as provide a “green buffer zone” between the oil tanks and the residential area.

But the March 7, 2007 decision threatened to boot the oil firms out anyway.

In their motion for reconsideration, the oil firms said parties to the case failed to inform the Supreme Court that Ordinance No. 8027 had already been superseded by Ordinance No. 8119, which gave Petron, Shell and Chevron seven years within which to leave the Pandacan depot and transfer elsewhere.

The oil firms likewise pointed out that several cases seeking to nullify both ordinances were still pending the decision of the Manila Regional Trial Court (RTC).

“Cases challenging the validity of Ordinance No. 8027 are still pending at the lower courts. We shall study the effect of the Supreme Court ruling on these cases,” Shell said.

Shell, Petron and Chevron have 90 days to submit to the Manila RTC a comprehensive plan and relocation schedule that should not go beyond five years.

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