THE Department of Energy (DoE) respects Petron Corp.’s move to shut down its oil refinery in Limay, Bataan as it is a business decision on the firm’s part, the agency’s top official said on Monday.
“That closure is a business decision by Petron. That, we respect because if they see that there is a better way to commercially operate, gagawin nila iyon (they will do that),” DoE Secretary Alfonso G. Cusi said in a press briefing.
His statement comes after Petron announced earlier this month that it would shutter its 180,000-barrel-per-day crude oil refinery, the country’s remaining refining facility after a rival closed its own.
Last week, Ramon S. Ang-led Petron said in a regulatory filing that it would be suspending operations at its plant in Bataan starting mid-January next year to minimize losses “in view of weak margins.”
Mr. Cusi said he supported Petron’s proposal to turn its refinery into a special economic zone under the Philippine Economic Zone Authority (PEZA).
“We want a PEZA zone to flourish in the country actively. As long as it [has a] positive impact to all, we want to promote that… It’s their business decision. They’ll present their proposal to us. [We’ll] just look at it. I don’t see any problem,” he said.
Mr. Cusi added that the closure of the country’s sole refinery would not affect oil supply.
“Ang gagawin din nila (What they will do is to) import the finished product and use their terminal as their storage for clean product instead of… crude oil. So, Petron is looking into also keeping their market share. That will not affect the supply of oil,” he said.
The firm’s move to close its Bataan refinery comes months after its rival Pilipinas Shell Petroleum Corp. announced the permanent shutdown of its 110,000 barrel-per-day refinery in Tabangao, Batangas, due to worsened margins and a drop in fuel demand amid the pandemic.
In the third quarter, Petron posted a P1.63-billion consolidated net income, which was largely driven by retailing margins. The firm said that despite the “modest” recovery, its refining segment continued to record losses because of thin margins.
Petron shares on Tuesday inched down 0.49% to finish at P4.10 apiece. — Angelica Y. Yang