MANILA, Philippines — Petron Corp. will proceed to shut down its Bataan refinery – the country’s last operating oil refinery – by mid-January.
In a disclosure to the Philippine Stock Exchange yesterday, Petron said its refinery in Limay, Bataan would be on economic plant shutdown beginning the second half of January 2021.
“During this economic shutdown, the company will conduct maintenance activities on key process units,” the oil firm said.
The Bataan refinery was shut down in May to give way to maintenance activities on major process units and to mitigate the impact of low fuel demand and poor refining margins. It resumed operations in October.
Employees of Petron’s refinery sought local government support to avert the permanent closure of the refinery in Bataan to save their jobs.
Thom de Villa, a shift supervisor, led some 50 Petron Refinery employees in formally calling on Limay, Bataan Mayor Nelson David’s help to save the refinery which has been in operation for the last 60 years.
“We believe that the government can do a lot to prevent the refinery from closing completely. If they and the Petron management work together, there may still be a way to save the refinery,” he said in Filipino.
Earlier, Petron president and CEO Ramon Ang cited the heavy cost of operations due the uneven playing field between importers and refiners.
He said the heavy taxes paid by refiners as compared to oil importers is making refining a difficult business to be in.
He said that fluctuations in global oil prices heavily weigh on the taxes paid by refiners, which caused significant losses for the firm.
As of end-October, Petron closed the period with a net loss of P12.6 billion from a net income of P3.6 billion in 2019. Consolidated revenues also declined 43 percent to P216.4 billion from last year’s P381.7 billion.
However, Ang said the closure of refineries is not unique to the country as the global refinery industry has been a tough business, especially with COVID-19 pandemic.
Last August, Pilipinas Shell Petroleum Corp. permanently shut down its refinery operations in Tabangao, Batangas and transformed the facility into a full import terminal to optimize its asset portfolio and enhance its cost and supply chain competitiveness.