MANILA -- Malacañang assured Wednesday that no takeover of oil firms' operations will be imposed despite threat of fuel shortage, as it already ordered the Energy department to avert the looming problem.

Deputy presidential spokesperson Lorelei Fajardo said the government is not keen on the proposal of some senators to import oil to avert a looming oil shortage in the country although the Constitution allows it.

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She said there are more constructive ways to address the issue and President Gloria Macapagal-Arroyo has already ordered Department of Energy (DOE) Secretary Angelo Reyes to avert the looming oil shortage after he announced that fuel inventory was good only for eight to 13 days.

Reyes, for his part, said Wednesday the government would take the necessary remedy in case oil shortage happens.

He said he had deployed his people to check the levels of inventory in oil depots.

"We can see this problem through. There is no need to panic. We are solving this problem," he added.

Senate President Juan Ponce Enrile, Senate Minority Leader Aquilino Pimentel Jr. and Senator Miriam Defensor Santiago suggested Tuesday the importation of oil amid the reported scarcity of fuel supply.

"The only solution is for the government to import if they have the money to import and the mechanism to import," Enrile said.

This was seconded by Pimentel and Santiago, both saying that the threat of oil shortage was temporary since oil firms only refused to import oil unless the government lifted the oil price cap.

But Fajardo maintained that the threat of shortage should not be a cause of alarm. She said the National Disaster Coordinating Council (NDCC) is handling the case and would soon come up with recommendations on addressing the threat.

This was supported by NDCC spokesperson Lieutenant Colonel Ernesto Torres, who said Wednesday the NDCC is already conducting reassessment to determine whether or not the lifting of the oil price freeze in Luzon areas is necessary.

President Gloria Macapagal-Arroyo earlier issued Executive Order (EO) 839, ordering the price freeze on petroleum products at the October 15, 2009 levels in Luzon following the devastations brought about by back-to-back storms in the region.

Several oil firms cried foul over this order, saying the EO has negative impact on their working capital.

On Wednesday, Willy Sarmiento, Shell Vice President for Finance of Pilipinas Shell, took the witness stand at the Makati Regional Trial Court for the first hearing of the oil firm's petition for the issuance of a Temporary Restraining Order (TRO) against the EO 839.

Sarmiento told the court that President Arroyo's order has been "unjust, oppressive and unconstitutional."

The order, according to Sarmiento, has had a grave impact on their business and distributing and refining fuel products as he said they were selling products at a loss.

Earlier, other oil players have said the EO has been distorting the supply and demand dynamics of the market, and has created losses that prevent them from importing crude oil and finished oil products.

Sarmiento said the company's sole refinery is in danger of being closed down. He also told the court that the price cap further aggravated the company's refining capability as it was already operating at a technical minimum level even prior to the Palace imposed price freeze.

As to financial losses, he told the court that from October 26 to 31 alone, Shell incurred losses estimated at P80,973,884.

"The massive losses continue every day since we are compelled to sell at prices lower than that dictated under the Mean of Platts Singapore and the Forex," he added.

But Assistant Solicitor General Marissa Macaraig-Guillen, who represented Executive Secretary Ermita and Energy Secretary Reyes and the Department of Justice-Department of Energy Joint Task Force, said Sarmiento is a "biased witness."

She reiterated that more people are benefiting from the continued implementation of EO 839.

She said it appears that more advantages are gained rather than disadvantages, especially for those who were heavily affected by typhoons Ondoy (international codename: Ketsana) and Pepeng (Parma).

President Arroyo also declared a state of calamity following the onslaught of Typhoon Ondoy on September 26 that inundated most parts of Metro Manila, particularly the cities of Pasig and Marikina, the towns of San Mateo, Cainta and Rodriguez (Montalban), and Antipolo City in Rizal province.

For Ermita, the EO 839 is not a big burden but in exchange for its lifting, some oil companies had already offered price discounts on their products. These proposals, according to him, had already been submitted to Justice Secretary Agnes Devanadera.

The Department of Justice (DOJ) is now studying the proposals, along with the NDCC. Consultation with the general public is also being done.

Ermita said that after analyzing the proposals, the two government agencies will make the appropriate recommendation to President Arroyo.

"Appropriate recommendations will be submitted by the NDCC to the government in order to implement measures to address the growing concerns on oil price freeze vis-à-vis the welfare of those affected by the recent calamities," said NDCC spokesperson Lieutenant Colonel Ernesto Torres on Wednesday. (AH/With PNA/Sunnex)