Petron Corp. warns of possible fuel shortage should the Philippines lose all of its crude oil refineries.
Ramon Ang, Petron president and chief executive officer, issued the statement following plans to close the company’s plans to permanently close its 180,000-barrel-per-day (BPD) refinery in Bataan “very soon.” Ang, however, indicated the refinery will stay afloat if it gets exemption from excise and value-added taxes.
When sought for comment, Department of Finance Secretary Carlos Dominguez III said there is no need to change tax laws for Petron, noting the company’s current situation is more of a “supply chain issue rather than a tax issue.”
“We don’t need to change our tax laws on this. Its happening worldwide, refinery margins are getting squeezed. Big oil companies have been shutting down their refineries in various parts of the world,” he added.Petron’s refinery is the sole crude refining facility in the country after Pilipinas Shell shut down its 110,000 bpd facility in Batangas last August.
Petron said with an operational refinery, the country can keep a fuel inventory that is good for up to 70 to 90 days. As a pure importer of finished fuel products, the country can only keep only up to 10 days of inventory.
“When the refinery is shut down, inventory level will really go down and we could experience some fuel shortage every time there is a typhoon or something,” Ang said.
The government mandates a minimum inventory requirement for refiners, a combination of 30 days supply of crude oil and finished products while bulk oil suppliers and liquefied petroleum gas (LPG) importers without refining capacity are asked to maintain 15 days supply of finished products and seven days supply of LPG. – J. Macapagal