NGV fleets are a step closer in the Philippines following agreements reached between the Department of Energy and upstream gas suppliers. The government and the Malampaya Consortium, representing Shell Philippines Exploration, Chevron Texaco and Philippines National Oil Company (PNOC), have settled on pricing for CNG for the next seven years, providing a basis on which bus fleet operators can commit to purchasing CNG buses. 

The CNG price is in line with a commitment made by the Consortium to keep CNG pricing at 50% of diesel prices to make the switch to CNG affordable for operators. CNG prices will commence at 8.46 pesos per liter equivalent, rising to 10.11 pesos in five years time, an average of about 9.5 pesos/liter over the duration of the program. At these prices, fleet owners are expected to recover the premium on CNG vehicle purchases through fuel cost savings within a three year time frame.

As early as 2004, four major bus operators were believed to have considered purchasing a total of 160 CNG buses in the near term, using funding from the Philippines Development Bank and other sources. Once the initial orders were confirmed by the Department of Energy, the Malampaya Consortium was expected to establish a 'mother' refueling facility at Batangas, about 100kms north of Manila to provide fuel for the Manila based fleets. Daughter facilities will be established by a downstream supplier at a location to be determined once the fleet commitments are known. The consortium is also constructing a pipeline from Batangas to Manila to establish a natural gas pipeline network but this is not expected to be completed until 2008.

Two demonstration CNG buses, one a Daewoo repowered by NGVI of Korea, and the other an Ashok Leyland from India,  have been operating routes in Metro Manila, Laguna and Rizal. The buses arrived in Manila last December 2003, where they were inaugurated at ANGVA's (Asia Pacific Natural Gas Vehicles Association) NGV Industry Development Workshop. A Department of  Energy representative says the buses have proved popular with commuters. Fuel for the buses have been supplied by PNOC, which manufactured a CNG refueling trailer especially for demonstration projects.

Though the NGV programs in the Philippines are primarily to improve urban air quality, the government is also keen to reduce imports of crude oil. High crude prices and a devalued Philippine Peso are putting stress on the local economy. Former Energy Secretary, Vincent Perez went to Amsterdam last May 2004 as an observer of the OPEC talks, and tried to make representations for OPEC countries to increase output.

The Department of Energy also spearheaded a program to introduce coco-methyl-ester (CME) bio-diesel blends into Philippine vehicle fleets. Toyota was to send a vehicle to the Philippines for testing with the CME blends following the announcement by Philippines President Arroyo that government fleets are to operate on a 1% CME/diesel blend. Other manufacturers participating in trials include ISUZU and BMW.