Petron’s coal plant gets tax incentives

BusinessWorld

Posted at Oct 20 2010 09:52 AM | Updated as of Oct 20 2010 06:55 PM

MANILA, Philippines - Petron Corp.’s planned P11-billion power plant in Limay, Bataan has bagged tax perks from the Board of Investments (BoI), the state agency said in a statement Tuesday.

The petroleum firm will be spending P10.84 billion to construct the 70-megawatt power plant which will supply electricity to its oil refinery, also in Bataan, by July 2012, the BoI said.

Sixty-one percent of the output will provide power to the refinery while the balance will be sold to Manila Electric Co. and electric cooperatives.

Under the 2010 Investment Priorities Plan, energy infrastructure projects are among business activities eligible for incentives such as income tax holidays and the duty-free importation of equipment.

“The plant will use coal as its primary fuel, to be substituted by petroleum coke depending on the market price of both fuels,” the BoI said.

Seventy-nine new jobs will be generated by the project.

So far, Petron has enjoyed a 50% increase in first-half sales to P115.354 billion over year-ago levels. Income, meanwhile, stood at P2.960 billion as of end-June, nearly two-thirds higher than the same period last year.

Petron share prices closed yesterday at P6.65 apiece, down 0.3% from Monday.

In a related development, the BoI also granted tax perks to Phoenix Petroleum Philippines, Inc.’s P123-million petroleum storage facility.

The facility in Talisayan, Zamboanga City will start operations next month and be manned by 12 workers. It can handle up to 4.9 million liters of oil products, the BoI said.