SINGAPORE (ICIS)--Philippines’ refiner Petron is mulling shutting down its 180,000 bbl/day refinery in Bataan permanently if the government fails to level the playing field in the industry.
“For Petron Refinery, I will close that down if talks with the government will not succeed,” Petron CEO and president Ramon Ang had told local reporters on 6 October.
The statement was confirmed by the company in a disclosure to the Philippine Stock Exchange (PSE) on 7 October.
Importing crude is more viable based on the Philippines’ current tax regime, as importers are taxed only once, Ang was quoted as saying in the news daily Philippine Star.
Refiners, on the other hand, are required to pay excise taxes upon arrival of their crude and raw materials, and on finished products.
If Petron shuts down the refinery, it will follow the course taken by Shell Philippines.
In mid-August, Shell announced that it is permanently closing its Tabango refinery in Batangas, due to poor refining margins and amid pandemic-induced destruction in demand, and plans to convert the site into a fuel import terminal.
Petron incurred a net loss of Philippine peso (Ps) 14.2bn ($298m) in the first half of 2020, with sales plunging 40% on slumping demand as well as heavy inventory losses caused by the plunge in crude oil prices.
The company has a combined refining capacity of 268,000 bbl/day in Malaysia and the Philippines and produces a full range of fuels and petrochemicals.
($1 = Ps47.71)
Visit the ICIS Coronavirus topic page for analysis of the impact on chemical markets and links to latest news.