An economist believes that the oil refinery industry in the Philippines would make a comeback once the COVID-19 pandemic subsides.
In an interview with state-run Philippine News Agency, Shan Saeed, global chief economist of Kuala Lumpur-based Juwai IQI, said that oil refinery players in the country are expected to consolidate between 2020 and 2021. He also expects oil trading to range between US$50 and US$65/barrel post-pandemic.
Saeed added that the situation of local oil and gas players in the oil and gas industry is not different from global players, as the whole industry is going through rough times resulting from low prices and low demand.
Petron owns and operates the country’s only refinery in Limay,Bataan, which produces 180,000 barrels per day.
Last week, Petron President and CEO Ramon Ang said that the oil giant will close the refinery “very soon” over taxation issues. Shell permanently closed its facility in Batangas City in August, while Caltex folded its own in 2003.
Pointing out that the pandemic has pushed down oil consumption by 25 to 30%, Saeed stressed that is crucial for the government to implement reforms to bring back investor confidence and thereby, stability to the economy.
Mergers and acquisitions, he added, will be keys in bringing back businesses that shut down amid the pandemic.