Petron, the country’s biggest oil refiner, may close its refinery in Limay, Bataan if the government wouldn’t heed its appeal for a level playing field in the local oil industry, said its President and CEO Ramon Ang.
Just last month, Shell closed down its own refinery, while Caltex’s shut down in 2003.
Ang pointed out that under the current tax scheme, it is more viable to import crude oil since importers are taxed only when their products exit their depots or terminals.
Meanwhile, excise taxes are imposed on refiners upon arrival of their crude and raw materials and on the finished product.
Under the Tax Reform for Acceleration and Inclusion law (TRAIN), an additional excise tax of Php6/liter is being imposed this year coming from Php4.50/liter in 2019 and Php2.50/liter in 2018.
TRAIN also raised excise tax for unleaded gasoline to Php10/liter in 2020 from Php9/liter in 2019, and Php7/liter in 2018.
Ang believes Petron should also be granted the same privilege given to every importer in the country.
Petron’s Bataan facility is the Philippines’ biggest and pioneering refinery, supplying 40% of the country’s fuel needs. It began operations in 1961 with a capacity of just 25,000 barrels per day. Since then, it has increased its capacity to 180,000 barrels per day.
Other than taxes, Petron is also feeling the brunt of the COVID-19 pandemic due to its effects on global oil prices and demand.
The company reported a consolidated net loss of P14.2 billion in the first half of the year as against the P2.6 billion net income it had in the same period last year.