Oil refiner Petron Corp. said Tuesday net income fell 77.5 percent in the first quarter to P1.3 billion from P5.8 billion in the same period last year because of the impact of the second phase of the Tax Reform for Acceleration and Inclusion law and higher crude prices.
“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,” said Petron president and chief executive Ramon Ang.
Malaysian operations accounted for P1.2 billion of the consolidated net income.
Petron said consolidated revenues dropped 4 percent to P124.6 billion in the first quarter, pulled down by a 5-percent decline in volume for the Philippine operations following the implementation of the Train Law which imposed an excise tax of P4.50 per liter. This translated into P8 billion in excise taxes and P1 billion in additional value added tax in the first quarter.
Petron said the law’s implementation created a price advantage for importers as local refiners maintained higher inventory in crude form which was immediately taxed upon production.