Ramon Ang, Petron Corporation president, and CEO said the company may shut its refinery in Bataan amid its tax troubles with the government.
“For Petron Refinery, I will close that down if talks with the government will not succeed,” Ang told reporters yesterday.
Petron’s rival Pilipinas Shell closed its refinery last month while Caltex Philippines shut down its refinery in 2003.
Ramon Ang said that it is more favorable just to import crude oil under the government’s tax rules because importers only pay tax once, which is when their products leave their depots or terminals.
However, the refiners, pay excise taxes upon arrival of their crude and raw materials and on the finished product.
The Tax Reform for Acceleration and Inclusion or TRAIN law imposed an additional excise tax of P2.50 per liter for diesel in 2018, increasing to P4.50 per liter in 2019 and P6 per liter in 2020.
TRAIN also increased excise tax for unleaded gasoline to P7 per liter in 2018 from P4.35 per liter, P9 per liter in 2019 and P10 per liter this year.
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Ramon Ang eyes shutdown of Petron refinery in Bataan
“We are in talks with the government, the Bureau of Customs, the Bureau of Internal Revenue, etc. 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,” Ang said.
Ramon Ang said the government should give Petron the same benefits granted to every importer in this country.
“If we will be asked to pay taxes upon arrival, everybody else should pay taxes upon arrival,” he said.
The refinery of Petron in Limay, Bataan supplies the 40 percent of the country’s fuel needs, making it the biggest and pioneering refinery in the Philippines.
Aside from taxes woes, Petron is also facing the economic impact of COVID-19 on the global oil demand and prices.
“I’m looking at lower income, but we are managing our business every day so we will survive and overcome this crisis,” Ang said.