The National Power Corp. said in a statement its fuel costs were down by about P1.2 billion - from P13 billion in 2004 to only P11.8 billion last year.

In 2004, fuel oil expenses amounted to 1,041.6 million liters while in 2005, the figure went down to 709 million liters.

NAPOCOR president Cyril Del Callar said the savings can be attributed to the decreasing use of oil-fired power plants, resulting to the state-owned firm's improved financial condition.

Del Callar said that the reduction in volume has mitigated the impact of the oil price increases, adding that crude oil prices has increased from P12.559 per liter to P16.708 last year.

Beginning this month, NAPOCOR implemented a dispatch order for its power plants, emphasizing the use of generation facilities fueled by cheaper and renewable energy sources.

Del Callar said they have increased the use of our hydro-electric power plants, from almost 12 percent to more than 17 percent and the use of oil in the generation mix has decreased to only one percent, from more than nine percent.

The target is to bring down the share of oil in the over-all generation mix to single-digit levels or to less than 10 percent, he said.

The Philippines' generation mix now consists of more than 40 percent coal, more than 22 percent geothermal, a little over 17 percent hydro, almost 13 percent natural gas, and less than eight percent fuel oil, the NAPOCOR statement said.*

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