Energy Dept: 1 of 2 RP oil refineries may shut down

It is highly likely that one of two oil refineries in the Philippines — Petron Corp. or Pilipinas Shell Petroleum Corp. — will shut down its refinery and import oil instead, the Energy Department said Monday. Energy Secretary Jose Rene Almendras declined to name the firm, saying it has not yet made its position official. In a text message to GMANews.TV, Petron chairman and CEO Ramon Ang said, “It’s not Petron." An official of the refinery approached him to say that the company has problems affecting the viability of its operation in the country, Almendras said. “It is having economic difficulties." “If it’s cheaper [to import petroleum products], then it’s going to be its business decision," Almendras added. Officials of Pilipinas Shell, which was most vocal about its P7 billion tax case pending at the Court of Appeals — were unavailable for comment. Early this year, the Court of Tax Appeals allowed the Customs Bureau to seize Pilipinas Shell’s imported raw fuel after the firm failed to pay its P7.34-billion tax obligation. Shell postponed its refinery expansion plans in the wake of the tax case. In January, Pilipinas Shell said that shutting down its operations would affect about 959 retail dealer stations which in turn employ nearly 17,000 workers. Pilipinas Shell supplies 33 percent of demand of power plants for power generation, including that of National Power Corp. It also accounts for 17.2 percent of the aviation fuels market, 24.6 percent of the marine transport market, and 70.2 percent of the bitumen demand by contractors engaged in road works. In previous years, Pilipinas Shell was hounded by safety and environmental concerns regarding its Pandancan oil depot. Pilipinas Shell, which processes 110,000 barrels per day in its Batangas refinery, is a unit of the Netherland-based Royal Dutch/Shell Group. Petron, whose refinery in Bataan has a capacity of 180,000 barrels per day, is controlled by San Miguel Corp. —JE/VS, GMANews.TV