PETRON CORP., the country’s sole oil refiner, said it has secured 2.48 million barrels of crude oil from Russia to spice up its petroleum product inventory until June.
In an announcement on Monday, Petron said it might consider buying Russian crude again if the fuel supply disruption persists and it cannot source sufficient crude from other suppliers to reinforce the country’s fuel supply.
The corporate said procuring Russian crude oil is just not its usual practice and that the purchases were made “out of maximum necessity” as an “extraordinary energy measure amid supply chain disruptions.”
It said it turned to sourcing from certainly one of the world’s top exporters “only after exhausting all commercially and operationally viable alternatives.”
Petron said it encountered shipping constraints for a previous two-million-barrel crude oil order following the closure of the Strait of Hormuz, a key global oil transit route, amid escalating tensions within the Middle East.
The corporate said the first shipment was unable to go through the strait, while the second shipment was canceled attributable to heightened risks within the Strait of Hormuz and the Red Sea.
Because the country’s largest downstream oil player and sole refiner, Petron said the disruption in a key shipping route constrained it to acquire Russian crude to assist secure domestic fuel supply.
Petron’s refinery in Bataan has a capability of 180,000 barrels per day and supplies a couple of third of the country’s fuel demand.
“A refinery shutdown for failure to secure crude would result in serious nationwide fuel shortages, sharp price spikes, panic buying, disruption to transportation and logistics, and broader economic dislocation-outcomes that might have had serious consequences for households, businesses, and significant public services in a rustic that is very depending on imported fuel,” the corporate said.
The corporate said it coordinated with the Department of Energy and the Department of Finance, which encouraged oil firms to secure alternative sources of crude oil and finished products.
Petron also said it received confirmation from the Bangko Sentral ng Pilipinas in a March 12 letter that there are not any domestic legal prohibitions on importing Russian crude oil.
The Philippines has been looking for alternative fuel sources as supply from the Middle East, a significant oil-producing region, faces disruptions attributable to the continued conflict involving Iran.
The US has temporarily eased certain sanctions on Russian oil to assist increase global supply amid disruptions in key shipping routes.
Russian Deputy Prime Minister Alexander Novak earlier instructed the energy ministry to draft a resolution banning gasoline exports from April 1 to July 31, Reuters reported, citing state-run TASS news agency.
The Philippines was placed under a state of national energy emergency starting March 24 in response to risks to the country’s energy supply.
Petron President and Chief Executive Officer Ramon S. Ang earlier renewed a suggestion to sell the corporate back to the federal government because the country deals with supply issues and rising fuel prices. — Sheldeen Joy Talavera