Petron Corp., the country’s biggest oil company, on Tuesday reported a net loss of P4.9 billion in the first quarter, compared to the P1.3-billion net income in the same period last year because of lower oil prices amid the coronavirus pandemic.
“The entire industry is going through a rough phase because of COVID-19’s impact on oil demand and prices. As expected, domestic consumption has gone down particularly in retail and aviation which is understandable because of travel bans and restrictions,” said Petron president and chief executive officer Ramon Ang in a statement.
Petron has undertaken maintenance activities on its 180,000-barrel-per-day refinery since May 5 and the temporary shutdown will mitigate the impact of low fuel demand and poor refining margins. The company did not say when the refinery would be shutdown.
The company incurred significant inventory losses as prices collapsed over demand contraction in both the local and international markets.
Local and international demand plummeted as businesses were forced to close shop and people were required to stay indoors to mitigate the spread of COVID-19
The benchmark Dubai crude plummeted by about 66 percent to $23 per barrel by end-March from $67 per barrel as of end-December last year.
Petron’s consolidated revenues fell 16 percent to P104.6 billion for the first three months from the previous year’s P124.6 billion.
Combined sales volume for the Philippines and Malaysia went down to 24.7 million barrels from the 26.3 million barrels recorded in the previous year.
“This is due to the sudden and significant drop in fuel demand as both countries imposed strict lockdowns towards the end of the quarter, limiting movement and economic activity, to contain the spread of the virus,” Petron said.
It said that since the enhanced community quarantine was implemented in the country, some stations temporarily closed or shortened their operating hours given the less number of vehicles on the road.
Petron said it implemented strict cost-saving and cash conservation measures in response to the current situation.
“Business is challenging. We have to be more prudent in managing our resources while ensuring that the needs of our customers are still met. Demand recovery will depend upon the lifting of quarantine measures and ultimately, finding a vaccine to fully restore mobility. While we are hopeful for a swift recovery, we know that these are things we cannot rush. The health and safety of the people is still the most important,” Ang said.
The company said it has enough inventory to supply domestic market requirements which would be replenished through importation of finished products.
The company activated its business contingency plan to cope with the crisis due to the pandemic.
Ang said despite the challenging business environment, Petron would continue to help alleviate the burdens of Filipinos particularly those on the frontlines, scholars, communities and other stakeholders.
“We have a commitment to ensure the unimpeded transport of essential goods and personnel. Apart from this, we also want to make things more bearable for our brave frontliners and the people who are most affected by this pandemic by helping the best way we can,” he said.
