Petron Corporation recorded a P 7.4 billion net income for three quarters in 2016 due to strong sales and improved efficiency in its refinery.
The company’s net earnings for nine months grew 47% from last year’s P 5.1 billion same period.
The country’s largest oil refiner attributed this increase “to strong demand and improved production efficiencies” with the $2 billion refinery upgrade at the start of the year.
“We are confident that we can substantially increase our profits in 2016 compared to last year as demand for fuels remains strong. Strong demand combined with strategic programs we have successfully executed means a higher growth trend for Petron over the long-term,” Petron president and CEO Ramon Ang said.
Consolidated sales volume went up six percent to 78.2 million barrels for the period versus 73.6 million sold last year with the substantial growth across all major business segments; reseller, industrial, liquefied petroleum gas (LPG), and lubricants.
Meanwhile, domestic sales grew by 10 percent to 36.4 million with increased industrial diesel sales, retail gasoline volumes, high demand from aviation companies, and growing LPG consumption from households.
In the previous year, Petron’s net income amounted to P6.3 billion.
Petron business risk? None! The company sells its product i.e. gasoline, diesel etc. by just benchmarking cost directly with imported products from its competitor. Petron is benefiting from low crude oil costs. Petron is able to profit from low input costs and sell their refined goods at prices that do not fall as quickly as crude. Specifically, the difference between the monthly average spot price of gas or diesel and the average price of crude oil purchased composes the profit of a refiner. This spread widens as crude prices move down. Expect more profit from Petron in the coming years. The government should look at this issue instead of thinking of additional taxes to the consumers.