Petron Corp. has confirmed in a disclosure to the Philippine Stock Exchange yesterday that it has allotted more than P200 million for its ethanol program for 2007.

Virginia Ruivivar, manager of Petron Public Affairs Department, said in a letter to the PSE that the budget will cover the oil firm's investments in storage, handling, loading and marketing facilities. The amount, she said, is part of the capital expenditures amounting to P5.022 billion for 2007 approved by Petron Board during its meeting in November last year.

Petron Corp., the country's biggest oil refinery which is 40 percent owned by the government, signed a memorandum of understanding with San Carlos Bioenergy Inc. on May, 30 2005, expressing intent to buy its entire ethanol production.

SCBI, projected to operate within the year, is currently building an integrated sugar mill, cogeneration plant and distillery complex for ethanol production. It is expected to produce 100,000 liters of anhydrous ethanol at 99.5-percent purity daily, while producing nine megawatts of electricity.

Petron Corp. president Khalid Al-Faddagh said in a recent press briefing their company's ethanol program will include the putting up of new facilities, including a holding tank for ethanol to be blended with Petron's gasoline products.

But Al-Faddagh said that even the San Carlos production will not be sufficient on its own, with the Biofuels Act of 2006 mandating the use of five percent ethanol blend for the entire country.

He said the challenge is to make ethanol available and ready nationwide.

The production of ethanol, a renewable and biodegradable fuel, is seen to reduce the country's dependence on foreign fuel.*NLG

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