Petron Corp. plans to resume the operations of its 180,000-barrel-per-day refinery in Bataan within four months after it was shut down amid the economic crisis.
“I think we will be able to meet it,” Petron president and chief executive officer Ramon Ang said in a virtual briefing, when asked if the oil refiner would be able to resume operations within the timeline.
Ang said Petron was still completing the requirements to fully register with the Authority of the Freeport of Bataan, which provides fiscal incentives to locators.
Petron registered the Bataan refinery as a economic zone enterprise as part of ways to improve its financial situation. FAB-registered enterprises are entitled to avail of fiscal incentives under Special Economic Zone Act of 1995 or Omnibus Investment Code of 1987.
“The Petron refinery is on shutdown, and we are waiting for the right timing when to resume operations,” Ang said.
Ang said the AFAB registration has numerous requirements including submissions to the Bureau of Internal Revenue, Department of Finance, Department of Energy and other agencies.
He said the AFAB registration would help the company improve its financial situation especially amid the low demand and low fuel cost.
Petron earlier said this would benefit the company in the form of better timing on the payment of value added tax which would be upon withdrawal of the products from the refinery.
“It can help but not necessarily overcome all the problems because the problem is the low consumption of fuel, low demand and the overcapacity of refining capacity in the world, so therefore refining margins is also gone,” Ang said.
“So [with] the AFAB registration, crude oil can arrive wherein taxes will be paid if it is converted to diesel o gasoline. It can help but it will not solve the problems,” he said.
Ang said Petron would likely continue to incur a net loss this year, “but not as big as last year.”
Petron Corp. incurred a net loss of P11.4 billion in 2020, coming from the 2019 net income of P2.3 billion, brought about by the impact of the COVID-19 pandemic to the oil industry.
Consolidated sales volume fell 27 percent last year to 78.6 million barrels from 107 million barrels in 2019. Revenues declined 44 percent to P286 billion from P514.4 billion, reflecting the impact of the pandemic on Petron’s financial performance.
Oil companies including refiners were severely impacted by the low demand during the health crisis and Petron looked for ways to cut back on costs.
Ang said Petron was also plagued by an uneven playing field versus oil importers which led the management to decide to shut down the refinery for economic reasons.
Rival Pilipinas Shell Petroleum Corp. also closed its refinery in Batangas province.