Petron Corp., the country’s lone refiner, will push through with shutdown of its Bataan facility by January amid the challenging market environment, a top executive said Monday.
“Yes, January for economic shutdown,” Petron president Ramon Ang, said when asked about the timeline of the company’s announcement to close the refinery because of the “difficult” environment brought about by the coronavirus pandemic and uneven playing field.
Ang said under the economic shutdown, the Bataan refinery with a capacity of 180,000 barrels a day, might still reopen once the market situation improved.
Petron’s refinery employs around 1,000 workers and deals with thousands of third-party suppliers.
The Petron refinery went on maintenance shutdown in May before moving to an economic shutdown to preserve cash amid the deteriorating refining margins.
Petron eventually reopened the refinery in September but a month later, Ang announced plans to close the refinery amid the uneven playing field compounded by low demand.
Petron reported a net loss of P12.6 billion in the first nine months, a turnaround from a net income of P3.6 billion in the same period in 2019 because of the 40-percent drop in domestic volume and the P13-billion inventory losses in the first four months of the lockdown.
Consolidated sales volume from Petron’s Philippines and Malaysian businesses contracted 24 percent in the first nine months to 59.5 million barrels from 78.7 million barrels a year ago.
Petron’s consolidated revenues also declined 43 percent to P216.4 billion from last year’s P381.7 billion.
Ang earlier said Petron, the only remaining refiner in the country, also faced arduous taxation not encountered by fuel importers, aside from operating under a volatile business climate.
“We have several tax-related concerns which we have already raised with the government. Under the current regime, refiners are faced with the burden of paying so much more taxes than importers making it more difficult for us to preserve the viability of operating a refinery in the country. Of course, we want to keep our refinery running and hopefully with the government’s support, we will be able to do this more efficiently,” Ang said.
The 180,000-barrel Bataan Refinery plays a crucial role in ensuring the country’s supply security and in providing employment opportunities particularly in the province of Bataan.
The refinery resumed normal operations in October.
Ang earlier expressed concern for the employees who would be affected by the refinery shutdown. Petron’s refinery employs around 1,000 workers.
“Nakakaawa lang empleyado kasi libo libo yan na mawawalan ng trabaho pero dun pa din tayo patungo,” Ang said.
Petron invested $2 billion in its Refinery Master Plan 2 project, which was completed in 2016, that allowed the refinery to produce more high-value products.
Petron has a network of 2,400 retail stations nationwide which captured about a third of the domestic market.
