Shell stops oil imports; tight supply seen

MANILA, Philippines - Pilipinas Shell Petroleum Corp. has suspended all its importations following the Court of Tax Appeals’ (CTA) rejection of its petition for an extension of the temporary restraining order on the seizure of its imports by the Bureau of Customs.

Roberto Kanapi, Shell spokesman, said they decided to temporarily stop their importation beginning Feb. 9 because “the BOC threat of seizure still remains.”

The BOC wanted to seize shipments of Shell to cover the oil firm’s reported P7.3 billion in back taxes for catalytic crack gasoline (CCG) imports.

Shell contested the BOC action, saying CCG is not a finished product but a raw material for unleaded gasoline production.

Even before the expiration of the TRO, Batangas Customs Collector Juan Tan – invoking section 1508 of the Tariff Code – attempted to seize shipments of crude, raw materials and other fuel products that were already tax paid and in the possession of Shell.

Tan’s action prompted Shell to seek help from the Batangas regional trial court, which issued a TRO on Feb. 10 prohibiting the BOC from entering Shell’s refinery “to hold, seize, confiscate and forcibly take possession” of Shell’s tax paid imported shipments. The TRO does not cover incoming imports.

Shell has also filed a motion for reconsideration with the CTA, seeking permission to resume its importations without the threat of its shipment being seized by Customs, while the case is being heard in the Court.

“We continue to exhaust all available legal remedies in order to prevent our property from being seized and avert any supply problems,” Kanapi said.

Shell currently accounts for 30 percent of the Philippine market. 

The domestic storage facilities of its competitors are limited, which means they will not have enough stocks to satisfy the demand in case Shell is forced to stop operations.

“If seizures occur, Shell will have no raw materials to run the refinery and no products to sell. We do not want this to happen but for purposes of transparency, we have to let the public and government know the consequences of the BOC’s arbitrary action,” Kanapi added.