Metro Manila (CNN Philippines, December 15) — Petron Corporation said it will be pausing its local refinery operations in Bataan by late January to cut losses, but assured that fuel supply will remain steady.
The listed oil refiner and retailer confirmed the statements of its president and chief executive officer Ramon Ang that the company will temporarily close its facility in Limay, Bataan amid tax woes.
Ang previously lamented duties on petroleum products, saying the Tax Reform for Acceleration and Inclusion or TRAIN law may have triggered rampant oil smuggling.
Current conditions make it cheaper to directly import fuel rather than process these products here, the billionaire tycoon said, as running a refinery meant the goods are taxed a second time after coming out of the facility.
The Petron refinery distills up to 180,000 barrels of crude oil per day, which is then sold through more than 2,400 gas stations nationwide. The company also operates in Malaysia. Its closure is meant to “minimize losses in view of weak refining margins,” but noted that the shutdown will not be permanent.
Petron suffered a ₱12.6 billion net loss from January-September following a 24% decline in sales volume as lockdowns kept people holed up in their homes. Economic activity has likewise slumped due to COVID-19 quarantine rules.
“During this economic shutdown, the company will conduct maintenance activities on key process units,” the firm told the Philippine Stock Exchange.
“There will be no supply disruption as a result of the shutdown given the healthy inventory of the company and the replenishment by the company of its supply through the importation of finished products,” it added.
Petron is the last refinery standing in the country. Pilipinas Shell Petroleum Corp. ended operations of its Batangas refinery in August, reeling from plunging global oil prices and depressed demand. Meanwhile, the Chevron refinery in Batangas has long been converted into an oil import terminal.
READ: Lower refinery output in PH may push fuel prices up – report
