The refinery of Petron Corp. will still shutdown temporarily despite being able to shore up its chances of continued operations by securing the registration of the facility in Limay town with the Authority of the Freeport of Bataan (Afab).
The Philippines’ remaining crude oil refiner said in a disclosure the facility would still undergo an economic shutdown “early this year” as previously announced.
The refinery’s status as a registered enterprise of the Afab “will help make its (Petron’s) refining business more competitive by improving its financial viability in the long run and address some of its major concerns,” the San Miguel Corp. subsidiary said.As part of its commitment to Afab, Petron is expected to undertake in the next five years several capital investments amounting to nearly P3 billion to further improve the efficiency of the integrated operation of its refinery, the company said.
Accreditation with the Bataan freeport—which entails tax perks—will address Petron’s tax woes, which company president Ramon Ang said was the main reason why the refinery was in danger of having to shut down permanently.
Earlier, Ang said a continually lopsided tax regime has put the refinery in Limay at a disadvantage compared to rivals that only import refined petroleum products.
Even then, Petron said that as previously disclosed and “considering that the refining business remains challenging both here and around the world, the plan for the refinery to undergo an economic plant shutdown early this year will still proceed.”
During this temporary shutdown, Petron intends to conduct maintenance activities on key process units at the refinery.
In October last year, Ang told reporters that Petron’s refinery was in danger of having to shut down permanently and that this could happen “very, very soon.”
A group of employees at the Limay refinery also called on officials of the local government to support a proposal to reclassify the refinery as part of the Freeport Area of Bataan.
According to Petron, a permanent closure of the refinery would affect 1,000 workers directly employed as well as more than 2,500 others who work in at least 25 third-party service providers. INQ
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