Metro Manila (CNN Philippines, May 7) — Petron Corp. saw profits slip in the first quarter because of higher fuel taxes and rising oil prices.
The listed oil company reported a consolidated net income of ₱1.3 billion in January-March, just a fourth of the ₱5.8 billion it made during the same period in 2018.
Local operations contributed little to the bottom line, with Petron’s Malaysian unit accounting for the bulk at ₱1.2 billion.
In a statement, Petron attibuted the lower income to a five percent decline in volumes, which they said is due to additional taxes on fuel.
The Tax Reform for Acceleration and Inclusion (TRAIN) law has so far added ₱4.50 per liter as excise tax on petroleum products since taking effect Jan. 1, 2018. For Petron, this added an estimated ₱8 billion in excise taxes plus ₱1 billion in value-added tax.
International oil prices have also been on the rise in recent months amid supply concerns.
“Compounding this challenge is the declining refining margins in the region, which penalized Philippine operations by ₱3.3 billion in the first quarter,” Petron said.
As a result, total revenues dropped by four percent to ₱124.6 billion.
“Despite lower margins, efforts to manage risks and strengthen our presence in key areas were implemented to mitigate its impact. We remain focused on completing major expansion projects that will further cement our leadership in the industry,” Petron President and Chief Executive Officer Ramon Ang said.
“We fully understand that long-term growth will always be threatened by inherent risks, and these investments will ensure our continued growth and profitability in the future,” he said.
The largest oil refinery in the country said it will soon deploy its Lube Oil Blending Plant to develop car lubricant products and expand polypropylene plants to generate bigger margins.
Petron opened 40 new gasoline stations in the country and continued to expand its Malaysia operations during the quarter, bringing its network to over 3,000 stations combined.
Petron added that the shutdown of its refinery in Limay, Bataan following the strong April 22 earthquake which hit parts of Luzon will not affect domestic supply, given enough buffers.
