Oil refiner Petron Corp. on Thursday offered to supply diesel products to state-run PNOC Exploration Corp. at a cheaper cost.
Petron president Ramon Ang made the offer, after the board of PNOC-EC approved the plan to import 50,000 metric tons of diesel that would be P5-per-liter cheaper than the current pump prices.
Ang said instead of buying diesel from other countries, PNOC-EC should secure it from Petron which has a refinery in Bataan to save on logistics cost.
“Definitely, our price is very competitive to be exported to Singapore. Freight alone, they will have huge savings. Why will they import there? That’s dollar outflow,” Ang said, referring to PNOC-EC’s plan.
“If they import, there is a huge risk of peso devaluation. There is a huge fluctuation if the price of oil and freight cost is already P5 if you import,” he said.
PNOC-EC president Pedro Aquino said Ang’s offer was worth considering.
Ang said PNOC EC would not need to pay for excise tax and value added tax if they would buy from Petron.
“They can buy from us and sell it and get BIR certification, so there will be no VAT and excise tax,” he said.
“Excise tax and VAT, that is already P11 to P12 [in savings], plus freight [of] about P5,” Ang said.
Ang said Petron’s fuels are Euro 5 and Euro 6-compliant, cleaner than the Euro 4 products that PNOC-EC was planning to import.
The board of PNOC-EC earlier approved the import plan and expects the first shipment to arrive this month.
Aquino earlier said the imports would be around P5 cheaper per liter than the prevailing pump prices.
Aquino said in a radio interview the company received an offer that was below the benchmark price of the Mean of Platts Singapore. MOPS is the benchmark pricing used by oil refiners in the region.
He said the company had not chosen a supplier yet because negotiations for the final price was still ongoing.
“It depends on the price we will get, but if we are able to get a price lower than the MOPS of Singapore, initially that is P5 less than the pump price,” Aquino said.
Aquino said the initial plan was to import 50,000 metric tons of diesel that would cost around P2 billion.
“I think it will be approved [by board] because what we aim to achieve is to bring down the cost of petroleum,” he said.
Aquino said the company would tap “aggregators” to distribute the lower-priced diesel to consumers.
“The program runs like this. The gasoline station owners or dealers, they will have aggregators because we really lack the machinery to distribute it. The aggregator will stand as distributor to dealer members in their specific region,” he said.