Petron incurs P4.9-B loss in 1st quarter

Petron Corp., the country’s largest oil refiner and marketer, suffered a net loss of P4.9 billion in the first quarter as the coronavirus disease 2019 or COVID-19 pandemic suppressed fuel demand and prices globally.

From P1.3 billion net income in the same period in 2019, Petron incurred significant inventory losses this year as prices collapsed due to demand contraction in both the local and international markets.

The benchmark Dubai crude plummeted by about 66 percent to $23 per barrel by the end of March.

Since the enhanced community quarantine was implemented in the country, some Petron stations temporarily closed or shortened their operating hours due to the lesser number of vehicles on the road.

“The entire industry is going through a rough phase because of COVID19’s impact on oil demand and prices. As expected, domestic consumption has gone down particularly in retail and aviation which is understandable because of travel bans and restrictions,” Petron president and chief executive officer Ramon Ang said in a statement.

Petron saw consolidated revenues decline by 16 percent to P104.6 billion as combined sales volume for the Philippines and Malaysia dropped from 26.3 million barrels to 24.7 million barrels.

The company pointed to the sudden and significant drop in fuel demand as both countries imposed strict lockdowns towards the end of the quarter, limiting movement and economic activity, to contain the spread of the virus.

In response to the current situation, Petron is implementing strict cost-saving and cash conservation measures as it activated its Business contingency plan to cope with the crisis due to the pandemic.

“Business is challenging. We have to be more prudent in managing our resources while ensuring that the needs of our customers are still met. Demand recovery will depend upon the lifting of quarantine measures and ultimately, finding a vaccine to fully restore mobility. While we are hopeful for a swift recovery, we know that these are things we cannot rush. The health and safety of the people is still the most important,” Ang said.

Since May 5, Petron’s Bataan Refinery has been on a scheduled turnaround to give way to maintenance activities on major process units and to mitigate the impact of low fuel demand and poor refining margins.

The company assured that it has enough inventory to supply domestic market requirements which will be replenished through importation of finished products.

Despite the challenging business environment, Ang said Petron would continue to help alleviate the burdens of Filipinos particularly those on the frontlines as well as its scholars, communities and other stakeholders.

“We have a commitment to ensure the unimpeded transport of essential goods and personnel. Apart from this, we also want to make things more bearable for our brave frontliners and the people who are most affected by this pandemic by helping the best way we can,” he said.

Targeting the vulnerable sectors, Petron has allotted over P1 million in assistance to its scholars in all levels nationwide. It has also donated food to its host communities as well as to health workers and personnel.

Having the most extensive service station network in the country, Petron’s wide presence is also proving valuable in boosting food accessibility through the initiatives of its parent company, San Miguel Corp. (SMC).