The Philippines' Department of Energy has set local monthly allocations, or LMAs, for domestic ethanol production at 91,000 cu m for the first quarter of 2019, a source with a major Philippine oil company said Friday.
That will be 12.17% lower than Q4 2018 but 20.06% higher year on year.
The Q1 LMAs comprised of 29,500 cu m for January, 29,900 cu m for February and 31,600 cu m for March, the Department of Energy document showed.
"There has been no increase on acreage and molasses production in general, so the LMA also should not have increased," a Philippine ethanol buyer said in response to a year on year jump in LMA for Q1 2019.
For the Q1 LMA, Green Future Innovations Inc.'s (GFII) will have no monthly allocations for January and February since its plant in San Mariano was damaged by Typhoon Mangkhut on September 15 and was expected to restart by March at the earliest.
GFII has an allocation of 1,500 cu m for March. GFFI's total monthly allocation for Q1 was down 1,500 cu m from Q4 2018 and down 2,000 cu m from Q1 2018. The ethanol plant has a capacity to produce 200,000 liters/day (200 cu m/day) of anhydrous ethanol.
The LMAs are determined every quarter, and oil companies in the country are allocated a purchase quota proportionate to their market share in the retail gasoline market.
Those oil companies are required to fulfill their domestic allocations before they can import cheaper fuel-grade ethanol, sources said.
The Philippines domestic bioethanol reference price in September dropped 5.23% month on month to Pesos 55.07/liter, which is equivalent to $1,101.40/cu m, data from the Sugar Regulatory Administration showed.
In comparison, the average imported fuel ethanol price in September was $426.65/cu m CIF Philippines, S&P Global Platts data showed. That was less than half that of locally produced ethanol even after including a 1% import duty and 12% value added tax.
