Petron Corp. plans a four-month economic shutdown of its refinery in Limay, Bataan starting February before making a final decision, its top executive said over the weekend.
“[The decision is] still shutdown for four months starting February. Maybe if the situation improves, [in] July, [we can] re-start,” Petron president Ramon Ang said, when asked if the shutdown would continue, after the company secured an approval from the Authority of the Freeport of Bataan as one of its registered enterprises.
Petron registered the Bataan refinery as a economic zone enterprise with the AFAB to find ways to improve its financial situation. The refinery has a capacity of 180,000 barrels a day.
Oil companies including refiners were severely impacted by the low demand amid the COVID-19 pandemic. Petron said it was looking for ways to cut back on costs as the COVID-19 brought down oil prices worldwide.
Petron said it was also plagued by an uneven playing field against oil importers, which led management to shut down the refinery for economic reasons supposedly starting January.
The Department of Energy expressed support to the proposal to reclassify the refinery in Limay as part of the Freeport Area in Bataan.
“We want the PEZA zone to flourish in the country actively, as long as it is positively, making a positive impact to our country, we want to promote that,” Energy Secretary Alfonso Cusi said.
Cusi also assured that the country’s supply would not be affected despite the refinery shutdown.
“They will import the finished product and use their terminal as storage for clean product instead of crude oil. Petron is also looking to keeping their market share, that will not affect the supply,” he said.
Ang earlier said the company would push through with shutdown of the Bataan facility amid the challenging market environment but the refinery might still reopen once the market situation improved.
He 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.
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.
Petron has a network of 2,400 retail stations nationwide which captured about a third of the domestic market.