Petron sees lower losses in H2

MANILA, Philippines — Petron Corp. is expecting to see lesser losses in the second half, but emphasized that it cannot regain incurred losses in the first six months.

“Much less,” Petron president and chief executive officer Ramon Ang said when asked about the firm’s potential losses in the second half.

Ang, however, emphasized that the company would not be able to regain what was already lost in the first half.

“The fuel consumption has gone down by at least 30 to 40 percent compared to normal times. So in terms of volumes, it’s really hard to regain,” Ang said.

Petron reported earlier a net loss of P14.2 billion from January to June. This is significantly lower than the P2.6 billion net income it registered in the same period a year ago.

The company also suffered a net loss of P4.9 billion in the first quarter.

Petron attributed the losses to the slump in demand, poor refining margins and collapse in oil prices.

The oil firm also reported inventory losses of nearly P15 billion in the first half.

Ang said earlier that the company may close its Bataan refinery, the country’s last standing refinery, very soon as it is burdened by the heavy cost of operations due to what he describes as the uneven playing field between importers and refiners.

Ang stressed that the heavy taxes paid by refiners as compared to oil importers is making refining a difficult business to be in.

He said refiners pay value-added tax (VAT) and excise tax, among others, when they import crude oil into the country and then pay another round of taxes after processing and selling their products to the local market

In addition, Ang said the fluctuations in global oil prices also affect the business.

A unit of credit watchdog Fitch Ratings earlier said the potential closure of the Petron refinery would leave the Philippines fully dependent on imports for its fuel needs.

“Implied import dependence is already forecast to see a big jump to 67 percent over the next five years, from 48 percent average in the past decade, although this could rise further depending on the outcome of Petron’s decision,” Fitch Solutions said.

“In our view, greater dependence on energy imports will leave the Philippine economy more tied to fluctuations in global energy prices,” it said.

“A downsized domestic refining output, next to rising need for imports, is expected to prove a drag on the trade balance over the coming years, creating pressures for the Philippines’ external financing position when domestic demand for energy is rising,” it added.