Metro Manila (CNN Philippines, August 6) — Petron Corporation reported a profit slump during the first six months of 2019, just as it announced the reopening of its fuel refinery plant in Bataan.
In a disclosure, Petron said it booked a ₱2.6 billion net income from January-June, spelling a 72 percent plunge from the ₱9.5 billion it booked during the first semester of 2018.
The country’s biggest oil company said profits drawn from refinery operations remain slumped during the period, which set back Petron’s profits by ₱5 billion.
Petron said total sales settled at ₱254.8 billion, 7 percent lower year-on-year following a fresh increase in excise taxes that took effect Jan. 1.
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 in 2018. Petron said this brought total fuel taxes to ₱6.75 per liter, worth more than ₱15 billion in excise taxes in the first half. The company also blamed these taxes for encouraging “illegal business practices” among suppliers.
Last month, Ang lamented that he’s been seeing rampant fuel smuggling following the higher taxes, noting that smaller gasoline stations are selling the products about ₱10 cheaper than Petron’s rates.
On the other hand, Petron enjoyed a 4 percent lift in sales in Malaysia, which helped soften the local slump.
Petron President and Chief Executive Officer Ramon Ang said the narrow margin is “temporary.”
“We remain optimistic for the second half of the year given signs of modest recovery from gasoline and petrochemical margins recently seen in the market,” Ang said in a statement.
Petron maintains its expansion plans, adding 72 gas stations locally and 24 in Malaysia as of end-June, on top of over 3,000 existing outlets.
The listed oil firm said it is resuming operations at its refinery in Limay, which was closed in April after a strong earthquake hit Luzon. The magnitude 6.1 quake traced to Castillejos, Zambales caused widespread damage in the region, and triggered an emergency shutdown and the flaring of gases at the Petron plant. The major oil player said all repair work has been completed.
READ: Gov’t counting on fuel marking to curb rising smuggling
