MANILA--A consumer group on Wednesday said the government should buy the Petron refinery to prevent the company from closing the facility, and to lessen the country’s vulnerability to oil supply and price spikes.
Several news organizations have reported that Petron president and CEO Ramon Ang was planning to permanently shut down the oil company’s Bataan refinery allegedly because the tax system put it at a disadvantage against importers of finished products.
Petron has to pay taxes when it imports the crude oil and raw materials used at its refinery, and pay again when it sells its finished products.
Importers of finished products, meanwhile, have to pay taxes only after selling their products.
Ang, according to reports, said Petron would close its refinery “very soon” if its appeal to the government for a “level playing field” in the industry was not heeded.
Petron did not respond to ABS-CBN News' request for comment at the time this story was posted.
Former Trade Undersecretary Vic Dimagiba of Laban Konsyumer said the government should try to keep the country’s only remaining refinery operating and be wary of having the Philippines becoming dependent on the importation of refined oil products.
“Yung may refinery ka sa bansa mo, you can keep inventory of crude oil. And then yung crude oil mo may flexibility ka to refine it to gasoline or to diesel. In other words, what I am saying is kung may problema sa supply ng diesel, you can produce more diesel than gasoline, and vice versa," Dimagiba said.
Dimagiba said the government should consider buying the refinery, or find a buyer who can keep it running.
“What I am saying is that, historically, maybe government should consider buying back for the strategic reason it has served over the years,” Dimagiba said.
Another alternative would be for Petron to simply put itself and its refinery on sale, and find a buyer who can continue operating the facility.
Last August, Pilipinas Shell announced the permanent closure of its refinery in Batangas, citing it was no longer economically viable for it to continue running the facility.
Dimgaiba added that San Miguel, which owns Petron, should have taken steps to protect its own interests when lawmakers were still discussing the planned reforms to fuel excise taxes in the Tax Reform for Acceleration and Inclusion or TRAIN law.
Petron posted a net loss of P14.2 billion for the first six months of 2020 versus its P2.6 billion net income in 2019 as fuel demand cratered during the COVID-19 lockdowns.
Two years ago, Petron said it was planning to build a new refinery to boost capacity.
Petron, Ramon Ang, Petron refinery closure, Laban Konsyumer, Vic Dimagiba, oil company, fuel, excise taxes, TRAIN law, ANC