Petron Corporation has committed to reopen its 180,000-barrel per day refinery in Limay, Bataan this July amid low fuel demand due to the COVID-19 pandemic.
Petron President and CEO Ramon Ang said that the oil giant is currently completing several requirements to be able to resume operations. These include documents to be submitted to the Department of Finance — including the Bureau of Internal Revenue (BIR) and the Bureau of Customs — and the Department of Energy (DOE).
Ang pointed out that it would take two months to get the BIR’s and Customs’ respective opinion on the matter.
But even with plans to reopen in place, Ang said that the refinery’s inclusion in the Freeport Area of Bataan (FAB) was not enough to make the oil giant profitable again in the face of quarantine restrictions.
Ang particularly lamented that things won’t really improve in 2021, believing that both power and fuel demand will continue to be low this year.
Petron’s application for the refinery’s inclusion in the FAB was approved in December 2020 following Ang’s announcement that the facility will be closed amid taxation issues.
FAB-registered businesses are entitled to fiscal incentives under Executive Order No. 226, or the Omnibus Investments Code of 1987, and Republic Act 7916, or the Special Economic Zone Act of 1995. Petron would benefit from these laws in terms of better timing on value-added tax payments, which shall be done upon the products’ withdrawal from the refinery.
The refinery’s workers and Energy Sec. Alfonso Cusi have supported Petron’s FAB registration in a bid to avert a permanent shutdown. As part of the registration, Petron committed a Php3 billion investment to improve the facility in the next five years.
Petron also stands to benefit from the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill if Pres. Rodrigo Duterte fully approves the version passed to Malacanang by the bicameral conference committee.
Photo from Petron website.