In the Philippines, there remains solid demand for a variety of petroleum products that are still largely imported.
According to the Department of Energy (DoE), demand for those products amounted to 83,621 thousand barrels (MB) in the first half of 2018, the most recent period for which figures are publicly available. It increased 1.6% from 82,277 MB in the same period in 2017.
“This can be translated to an average daily requirement of 462 MB compared with last year’s level of 454.6 MB,” the agency said on its Web site.
Diesel oil demand in the first half of last year rose 5%, while demands for liquefied petroleum gas (LPG) and gasoline went up 10.5% and 2.4%, respectively. Only fuel oil demand experienced decline by 10.9%.
Diesel oil made up a huge chunk of the product demand mix at 42%. Gasoline accounted for 23.4%, LPG 11.8%, kerosene/avturbo 10.5%, fuel oil 5.9% and other products 6.3%.
By the end of June 2018, the actual crudes and petroleum products inventory of the country stood at 21,844 MB, an equivalent of 46-day supply. This figure was 12.1% lower than 24,854 MB or a 51-day supply equivalent recorded by the end of June 2017.
DoE noted that a minimum inventory requirement (MIR) was put into effect by the government on account of the risks facing the downstream oil industry, from geopolitical instability to supply delivery problems affecting calamity-stricken localities.
“Current MIR for refiners is in-country stocks equivalent to 30 days while an equivalent of 15 days stock is required for the bulk marketers and seven days for the LPG players,” the department said.
It added that upon the effectivity of the Tax Reform for Acceleration and Inclusion (TRAIN) law, it ordered oil companies to sell their old stocks, or those that they possessed by Dec. 31, 2017, at the old excise rate or at zero rate tax for diesel product.
The country imported more crude oil in the first half of 2018 (41,747 MB) than it did in the same period in 2017 (36,016 MB). Saudi Arabia was the top supplier of the commodity to the country; 15,754 MB or 37.7% of the total came from the country. It was followed by Kuwait (24.6%), United Arab Emirates (18.6%) and Russia (8.4%).
The crude oil imports totaled $2,915.1 million. The amount was 54% higher than the previous year due to higher cost, insurance and freight (CIF) price per barrel, which hit $69.827 in the first half of 2018 compared with $52.559 in the first half of 2017.
A total of 45,403 MB of petroleum products were imported in the first of 2018, down 6.1% from first half of 2017’s 48,348 MB. Imported diesel oil fell 8.3%. Imports of gasoline and fuel oil also declined, by 3.7% and 17.8%, respectively. Only LPG import increased, albeit only by 2.2%.
Diesel oil accounted for 39.8% of the product import mix. Gasoline had the next highest share of 17.8%, followed by LPG with 15.3%. Kerosene/avturbo comprised 10.1% of the total, fuel oil 6% and other products 11.1%.
“Total gasoline import reached 41.1% of gasoline demand while diesel oil import was 51.5% of diesel demand. LPG import, on the other hand, was 70.5% of LPG demand. Total product import was 54.3% of the total products demand,” DoE said.
Total oil import bill rose to 34.4% in the first half of 2018 to $6.312 billion, and a depreciating peso was partly to blame because it rendered more expensive the shipments of crude oil and finished petroleum products.
DoE said, “This was attributed to the combined effects of higher import cost and increased import volume of crude oil vis-a-vis last year.”
Total product import cost went up 21.2% to $3,396.7 million at an average CIF cost of $74.812 per barrel from $$2,802.3 million at an average CIF cost of $57.962 per barrel. “The increase was attributed to higher import cost this year and increase in the volume of total imports,” the department said.
It also noted that the average dollar rate during the first half of 2018 was $51.974, higher than the average rate of $49.928 during the comparable period in 2017.
Meanwhile, the country exported more petroleum products in the first semester last year — 7,888 MB, up 33.2% from 5,920 MB.
“Vis-à-vis last year, condensate, the top exported product for the period increased by 43.7%. Gasoline, toluene and mixed C4 exports also rose by 49.8%, 40.8% and 18.7%, respectively. Meanwhile, 782 MB of fuel oil and 192 MB of reformate were exported this year versus nil export of first half last year,” DoE said.
Condensate made up 26.7% of the total export mix. Propylene accounted for 12.4%, gasoline 11.4%, naphtha 10.7%, pygas 10.4%, fuel oil 9.9%, mixed C4 7%, mixed xylene 4.6%, toluene 3.1%, reformate 2.4%, benzene 1.4% and LPG 0.1%.
However, the total crude oil exports of the country, which came from the Galoc oil field in Palawan, also known as Palawan Light, fell slightly from 704 MB to 690 MB.
Earnings from petroleum exports increased significantly by 51.5% to $633.1 million from $417.8 million.
And for the first half of 2018, the net oil import bill of the country stood at $5,678.8 million, up 32.8% from $4,227.4 million.