Without forwarding any concrete step on what government can do, the Department of Energy Monday confirmed that oil supply disruption and shortages could be felt starting next week as inventory of finished petroleum products is sufficient for only a maximum of 13 days.

Pressed for any contingency plans, Energy Secretary Angelo T. Reyes simply said, “I don’t know yet”, and that the only message he could convey to the public at this point was, “don’t panic”.

During Monday’s stakeholders’ meeting convened by the department, the energy chief also did not hide irritation over reporters’ questions as to what assurance the government can give that the market will not run dry once the 13-day inventory is exhausted and the oil firms would not have additional importation because of extremely squeezed margins.

Oil companies have refused to order new inventory in the light of President Arroyo’s Executive Order 839 freezing the prices of petroleum products in Luzon to October 15 levels purportedly as part of rehabilitation measures after floods and typhoons devastated the main island.

The DoE described the country’s oil supply situation as “very tight” and any undue circumstances, including delays in shipments or new typhoons, may result in shortages. The normal level of inventory for finished petroleum products is 21 days.

A Cabinet meeting is scheduled at the Palace Wednesday, but the energy chief would not commit to recommend to President Arroyo on the lifting of EO 839.

The only pronouncement made by Reyes was, “you cannot force private corporations to sell at a loss.”

Total Philippines noted that its diesel supply can only last until November 17, and importation of additional supply is not a certainty while EO 839 remains.

Petron President Eric O. Recto also said “we cannot cope” when it comes to plugging the supply shortfall, noting the sudden demand surge because of disruption in the supply from the side of the importers.

“Based on the report we have from our dealers Tuesday, we are experiencing higher sales,” he said, noting that such development triggers disruption in the supply equation as some smaller players have resorted to cutting their operating hours to conserve stocks.

Shell Philippines country chairman Edgar Chua said there is normally a lag time of two to three months for their crude shipments to be processed and delivered to retail outlets.

Flying V chairman Ramon Villavicencio said their importation can only last until November 10.

The transport group FEJODAP disclosed that the gasoline station they have been patronizing has already closed shop.

Independent retailers of liquefied petroleum gas (LPG) for their part said they can still survive while complying with EO 839 until the end of the month.

However, small businesses retailing LPG cylinders might have no choice but to close shop if the price ceiling stays in effect until December, LPG Marketing Association President Arnel Ty said.

“We can still cope with it (price ceiling) until the end of this month but we see international prices rising again in December,” Ty pointed out. “If the wholesale price goes higher than the retail price, then definitely traders would stop selling.”

“There would be abnormalities in supply if we are still forced to sell at the October 15 level,” warned Ty.

“Our suppliers have already added P4 on the wholesale price of our LPG products. Yun ang nagpapahirap sa amin.”

On Sunday, the LPGMA head floated the possibility of hiking their price by at least P3 a kilo sometime before Christmas. This would translate to a P33 add-on for every 11-kilo cylinder of cooking gas.

Visayas and Mindanao, which are not covered by the price ceiling, already saw its LPG prices go up P3.50 a kilo last Friday. The hike was enforced by oil giant Petron Corp., sellers of Gasul.

According to Ty, the LPGMA’s current suggested retail price (SRP) of P580 per tank is of the same level as that of big oil companies. Without the price cap, the SRP would reach P630 in Luzon, around P20 less than current prices in Visayas and Mindanao.

Meanwhile, the government will look into proposals to include electricity in the temporary price freeze in Luzon although such situation may be a long shot, a Palace official said Monday.

Deputy Presidential Spokesman Anthony Golez said they are “open to suggestions” to expand the coverage of EO 839 following the latest price hike imposed by Manila Electric Co.

“The Arroyo government is always open to suggestions of different groups and we are very sure that somebody is going to look for the wisdom and validity of this clamor. That clamor will be studied,” Golez said in a news conference in the Palace.

The possibility of a government’s imposed price cap on electricity prices however is not as easy as it seems, according to Golez. He said the power sector is already supervised by the Energy Regulatory Commission, an independent constitutional body, to ensure reasonable rates.

“We have to get in touch with realities also that at hindsight, Meralco’s retail rates are composed of different charges. These are generation, transmission, systems loss, distribution, supply and metering.

“The last three come from Meralco and these charges are fixed by the Energy Regulatory Commission. They remain fixed until new rates are approved by the ERC while the first three aspects are periodically adjusted based on adjustment mechanism adopted by the ERC also. They are merely pass-on charges,” he said.

Despite warnings raised by some concerned groups about its adverse effects o the economy, Golez reiterated that EO 839 will remain in effect in Luzon until the state of calamity is lifted.

“The President is firm over her decision on the executive order. People close to the President can advise but the President will decide what measures to take,” he said.

In a related development, the Makati Regional Trial Court has summoned Executive Secretary Eduardo Ermita and Energy Secretary Reyes to attend Wednesday’s hearing on the petition of Shell to lift EO 839.

Judge Winlove Dumayas of the Makati RTC branch 59 also ordered the two Cabinet officials to answer within 15 days the petition for prohibition, mandamus and injunction filed by Shell which described EO 839 as unconstitutional.

“In accordance with the Supreme Court Administrative Circular No. 20-95, let the summary hearing on the application for the issuance of temporary restraining order be set on November 11, 2009 at 10 a.m.,” Dumayas said in his one-page order.

In its petition, Shell said the EO will “logically result in supply shortages, rationing of petroleum products, and the development and growth of illegitimate market for oil products in the country.”

Shell vice president for communications Roberto Kanapi reportedly claimed that the EO failed to meet the conditions prescribed in the Constitution for determining the circumstances that warrant the President’s exercise of emergency powers.

Kanapi’s statement was also echoed in the petition that also disputed the EO’s premise that the President’s exercise of emergency powers was based on the Oil Deregulation Law. Shell claimed that the Oil Deregulation Law was not the operative legislation in this case as “it does not contain reasonable terms and restrictions set by the Constitution.” (With reports from Ellson Quismorio, Genalyn Kabiling and Kris Bayos)