“For Petron Refinery, I will close that down if talks with the government will not succeed,” The Philippine Star quoted Ang on October 7.
The president and CEO of the country’s biggest oil refinery was referring to current rules that impose excise taxes on its products twice: once when the imported crude and raw materials arrive, and then on the finished product. Imported crude oil, meanwhile, is taxed only once.
“We are in talks with the government, the Bureau of Customs, the Bureau of Internal Revenue, et cetera,” Ang said further. “We are paying taxes upon arrival of crude and we are paying so many taxes upon arrival. We are in discussion with Customs and BIR to give us a level playing field. Importers pay taxes when the products exit their compounds. In our case, we pay taxes on raw materials, crude oil, chemicals and advanced tax etc upon arrival.”
Petron is the last of the three big oil players that still operate a refinery in the country. Shell closed its 60-year-old facility in Tabangao, Batangas, in August, citing the crippling effects of the pandemic. Caltex closed its refinery in 2003.
Opened in 1961, Petron’s refinery has a production capacity of 180,000 barrels per day. It suspended operations in May 2020 as demand for oil nosedived due to the health crisis.
Petron, which is a unit of San Miguel Corporation, provides about 30% of the country’s petroleum requirements. It has 30 terminals and 2,400 stations nationwide. It posted a consolidated net loss of P14.2 billion in the first six months of the year compared with its P2.6 billion net income during the same period in 2019.
“I’m looking at lower income, but we are managing our business every day so we will survive and overcome this crisis,” Ang told The Philippine Star.
NOTE: This article first appeared on Esquiremag.ph. Minor edits have been made.