Will the decommissioning of the country’s only two oil refineries have any effect on the nation’s long-term energy security?
Surigao del Sur Rep. Johnny Pimentel is seeking answers to this question, and wants the House energy committee to look into the matter.
“Without any oil refining capacity of our own, is there any chance our supply of ready-to-use fuels might be disrupted to a certain degree sometime in the future, once our economy starts to recover? We want this and other questions answered by the Department of Energy and by the oil industry,” Pimentel said.
Refineries generate finished petroleum products such as gasoline, diesel, kerosene, jet fuel and LPG, among others, out of crude oil.
Many refineries in other parts of the world—not just those in the Philippines—are also getting mothballed because of uncertain prospects for a recovery in fuel demand after the COVID-19 pandemic destroyed consumption, Pimentel pointed out.
“Could a sudden reduction in global refining capacity possibly upset our supply of finished fuels in the future? Do we have enough storage capacity here for ready-to-use fuels in the event of disasters or crises that might set back the operations of refinery hubs abroad? We want these concerns addressed,” Pimentel said.
“We are counting on the (House) energy committee to tackle these issues in a formal inquiry,” Pimentel said.
Pilipinas Shell Petroleum Corp. has dismantled its 110,000 barrel per day refinery in Batangas City in favor of an oil import terminal. The company had initially suspended its refinery operations in May.
Last week, Petron Corp. also said it will “suspend” the operations of its 180,000 barrel per day refinery in Limay, Bataan by mid-January 2021.
“Petron is bound to follow in the footsteps of Shell,” Pimentel said.
Instead of refining crude oil at a loss, both Shell and Petron have found it more profitable to supply their combined 3,526 retail stations across the country with imported finished petroleum products.
Shell and Petron reported P13.9 billion and P12.6 billion in net losses, respectively, from January to September this year due to deteriorating margins amid the 40 percent plunge in fuel demand.