Saturday, December 06, 2008 Petron can present financial books to lawmakers
LEADING refiner Petron Corporation has offered its financial books to Congress for lawmakers to determine themselves if the company is benefiting from the steep drop in crude and finished product prices.
"If lawmakers actually look into our financial position, they would find that we are in a very difficult situation," said Petron public affairs manager Virginia Ruivivar.
She issued the statement in reaction to criticism being thrown against oil firms for their failure to immediately reflect the drop in the crude prices in the international market.
Ruivivar said that Petron in the first nine months of the year reported a 32 percent drop in net income compared to 2007.
The company's margins contracted as domestic prices of refined products fell much faster than its crude costs.
With the continuing steep drop in crude prices, Petron expects to post a net loss in the 4th quarter, Ruivivar said in a statement.
Including product exports, Petron's return on sales as of the 3rd quarter is equivalent to only about 1.3 percent. This means that the company only earns one centavo for every one peso sale.
"We have always supported initiatives to ensure transparency in oil pricing. As a publicly-listed company, our financial statements can be scrutinized by anyone," Ruivivar added.
"In the first half of the year when international prices were rising, we fully cooperated with the DOE (Department of Energy) when it conducted an audit to check if local prices were reasonable," she explained.
Early this year, the DOE directed auditing firm SGV and the University of Asia and the Pacific to audit the books of oil firms.
The Petron official noted that "if oil companies had been overpricing, it should have shown up in extraordinarily high profit rates."
But the study revealed that Petron's return on equity from 2005 to 2007 - when oil prices were rising - were much lower than interest rates on Treasury Bills and Treasury Bonds.
It also found out that local pump prices did not go up as fast as the price of crude and finished products abroad during the period, she further declared.
In the Tuesday meeting called by Energy Secretary Angelo Reyes, Petron, together with Pilipinas Shell and Chevron Philippines, refused to confirm if there would be another rollback on the prices of petroleum products this weekend.
Roberto Kanapi, Shell spokesman, said it would still depend on the movements in the market. "Assuming all things are the same (prices are maintained at the same level today) we could consider a rollback (for gasoline and diesel)."
Kanapi added that Shell, in terms of income during the first nine months of 2008, posted 10 percent drop in its profit and a reduction of six percent in terms of volume sales.
Independent oil firms similarly said the same thing.
Fernando Martinez, president of Eastern Petroleum, said that as far as they know, they have already reflected the rollback for the month of November and any price cut in the month of December would have to be dictated based on market forces.
For her part, Director Zenaida Monsada of the DOE said the continued drop in oil prices is really beneficial to the country.
Asked if there would be any rollbacks on the pump prices for this weekend, Monzada said: "I think the Secretary indicated that we're expecting some rollback up to the end of the year. But we could not tell until when it would last."
But so far, she said, there was no notice yet made by oil companies on the possibility of implementing another oil price cut.
"As of now, I have not received any indication of rollback over the weekend. But we're expecting one or two more rollbacks depending on the average price before the end of the year. For LPG, the oil companies have cut price by more than half. For gasoline and diesel, we see some room, but we can't say when and how much alongside the continuous drop in world oil prices," Monzada said.
Price monitoring conducted by the DOE indicated that retail prices of gasoline as of December 4 ranged between P30 to P36 per liter, while diesel stands at P31 to P35 per liter.
Dubai crude average as of December 3 was US$44 per barrel lower than the November average of US$50 per barrel. (MSN/Sunnex)
