Phoenix stops buying imported oil

MANILA, Philippines — Phoenix Petroleum Philippines Inc. of businessman Dennis Uy has suspended its procurement of imported diesel and gasoline.

In a disclosure to the Philippine Stock Exchange, Phoenix said that it has stopped purchasing imported petroleum in favor of domestic fuel since March 2023 to mitigate the impact of global price swings.

“Please note that under the current trading conditions such as, but not limited to price volatility, the company finds it more favorable to buy domestic fuels than imported fuels,” Phoenix said.

Phoenix said the adjustment gives the company the flexibility to manage resources. Further, the shift to domestic petroleum allows Phoenix to minimize risks as a result of inventory losses.

However, Phoenix is still closely monitoring the international fuel market, ready to shake up its supply if the trading situation improves. The company is trying to recover financially after the business was hit hard by the pandemic-induced slowdown.

“Nonetheless, should trading conditions change, the company will evaluate supply approach and strategy,” Phoenix said.

In its latest financial report, Phoenix reported that its net loss more than tripled to P3.68 billion in the nine months to September last year from P1.07 billion during the same period in 2022.

Although Phoenix managed to bring down expenses by 56 percent to P43.98 billion, its revenue also declined at the same rate to P42.8 billion during the period.

Phoenix said the business is suffering from the lingering effect of the pandemic and spiking fuel prices. The company was injured by geopolitical tensions in Europe, particularly Russia’s attacks on Ukraine that triggered an unprecedented increase in petroleum costs to the detriment of fuel importers like the Philippines.

As of September last year, Phoenix has sustained a 47-percent drop in its volume sold to 1.16 billion liters from 2.18 billion liters a year ago. The company attributed the decline to the adoption of a new business model where it procures its retail requirements from a third party.

In response, Phoenix embarked on a series of measures to prevent operational costs from rising, including trimming its capital expenditures.

Toward the end of 2023, Phoenix said it would enter into a sale and leaseback agreement with BDO Unibank Inc. – the largest bank in the Philippines – covering several assets, such as depots and terminals.