Filipinos will soon have a choice of alternative fuels for their vehicles: diesel with a blend of coconut by-product, gasoline with ethanol from sugar and compressed natural gas.
But consumers would need to be convinced of the benefits of using the alternative fuels because they will be more expensive to buy than refined crude oils, Energy Secretary Vincent Perez said.
"We could create a market either through a legislative action or administrative order, but at the end of the day, the consumer, the motorists will have to make their choice," Perez said during the launch late on Friday of a plan to turn the country's excess sugar into ethanol.
Ethanol, widely used by car drivers in Brazil, is an alternative fuel that can be produced from plants like sugar cane, corn and cassava.
The Philippines is turning to coconuts, sugar and other plants which it produces in abundance to try to cut its dependence on imported fuel after world crude prices surged this month to record levels of almost $50 a barrel.
The Southeast Asian country last year imported more than 91 million barrels of crude and 37 million barrels of petroleum products.
Perez said that while the country, the world's largest shipper of coconut oil, can produce the required volume for a 1 percent blend of coconut methyl ester in diesel, the resulting product is not price competitive.
"There is no economic incentive to produce coco diesel even at one percent (blend)... I think we could learn lessons from that," he told sugar industry leaders.
But Danilo Coronacion, administrator of the Philippine Coconut Authority, said motorists would see savings because vehicles perform better using coco diesel.
Motorists have to pay up to 0.5 peso (0.9 of a US cent) extra for a litre of coco diesel compared with regular diesel but the better performance would translate into a saving of up to 2.50 pesos per litre, he said.
Last month, government vehicles started using a one percent blend in their diesel. The government plans to promote coco diesel to the public in 2005.