[PHOTO AT LEFT - BIODIESEL: President Arroyo inspects seedlings of the jatropha plant, the fruit of which is a major source of
biodiesel fuel, at the 35-hectare jatropha nursery and plantation inside the Army’s Fort Magsaysay in Nueva Ecija which she visited yesterday. Photo By WILLY PEREZ]

MANILA, June 2, 2006 (STAR) By Aurea Calica - The government is considering building the country’s first jatropha processing plant as part of its effort to develop alternative fuels and cope with rising crude oil prices on the world market.

President Arroyo ordered the Department of Energy (DOE) to widen the planting of jatropha seedlings not only at military camps but also on all available public land.

Mrs. Arroyo issued the directive to Energy Secretary Raphael Lotilla when she visited and inspected a 35-hectare jatropha plantation at Fort Magsaysay, a sprawling Army training camp in Nueva Ecija.

Lotilla said at least 100 to 200 hectares of jatropha fields would be needed to start mass production of jatropha-based diesel fuel.

The DOE is now studying the possibility of building the country’s first jatropha processing plant.

Only India and Germany currently have processing plants for jatropha seeds.

Mrs. Arroyo directed Lotilla to coordinate with local governments and the private sector to encourage them to plant jatropha trees on their idle lands.

"Jatropha is the best (source of) alternative fuel and we need to propagate this," she pointed out, adding that jatropha is easy to grow even without fertilizer.

Mrs. Arroyo visited Fort Magsaysay yesterday morning to personally inspect the jatropha plantation.

She congratulated Maj. Gen. Romeo Tolentino, chief of the military’s Northern Luzon Command, and his men for helping the government in its efforts to minimize the country’s dependence on crude oil, most of it imported from the Middle East.

Mrs. Arroyo toured the nursery where the seedlings of different fruit-bearing trees and jatropha were being grown.

She then inspected the 35-hectare jatropha plantation and showed to reporters the fruit of a seven-month-old jatropha tree.

During the inspection, Tolentino showed Mrs. Arroyo a customized backhoe and a portable digging machine he had invented to speed up planting.

Tolentino’s command is the first in the military to comply with Mrs. Arroyo’s order to plant jatropha trees at its bases.

The Arroyo administration fears that soaring crude oil prices might set back the country’s economic recovery efforts.

Last month, Mrs. Arroyo slashed tariffs on crude oil and refined products for six months to cushion the impact of record-high world market prices of crude oil on local gasoline prices and the country’s economy.

Tariff levels, currently at three percent, would be reduced to between two and zero percent "based on certain triggers indexed to oil prices in the world market," Mrs. Arroyo said in the presidential order issued earlier this month.

She said "soaring fuel prices to unprecedented levels brought about by current international and geo-political tensions and tight gasoline supplies, warrant the modification in the rates of duty on crude petroleum oils and refined petroleum products to protect the consumer welfare."

"The tariffs shall be automatically restored as international oil prices move down based on the same trigger prices," the EO said without giving any specific price levels.

"An automatic tariff mechanism, based on certain triggers indexed to international oil prices, would soften the impact of high and rising world prices on the economy and the consuming public without necessarily draining government revenues," the order said.

The "triggers" pertain to certain levels of oil prices where upward and downward adjustments in tariffs would be made. The duties on oil would be reduced to two percent, one percent or zero depending on a certain price level of crude in the world market.

The Arroyo administration had earlier backed off from proposals to temporarily halt the 12-percent expanded value-added tax on oil products after foreign lenders reacted negatively, warning that Arroyo administration’s target to balance its national budget by 2008 could be undermined.

The government implemented a 12-percent expanded value-added tax in February, which is the centerpiece of Mrs. Arroyo’s fiscal reforms intended to bridge the budget deficit and forestall a looming fiscal crisis. The expanded tax is expected to yield at least P80 billion in fresh revenue annually.

Chief News Editor: Sol Jose Vanzi

All rights reserved