Petron subsidiary net income up 20%, also posts double digit sales

Published October 23, 2019, 12:00 AM

by manilabulletin_admin

By Myrna M. Velasco

Petron Freeport Corporation (PFC), a subsidiary of the country’s leading oil firm, has logged 20-percent growth in net income in the first semester, mainly on account of brisk expansion on sales volume.

From January to June this year, Petron Corporation noted that this subsidiary which operates service stations inside the Subic Freeport Zone, posted P48.7 million in net profit; while also registering double digit growth of 14-percent in sales in the same period.

Petron’s operations in Subic involve two major service stations with amenities of convenience stores; and it similarly leases to other non-fuel locators.

The end-users being served by this Petron firm are mainly locators in the freeport zone – and are exempt from paying national and local taxes, including excise taxes.

By government edict, fuel products intended for free port zones, including that of Subic, are also tax-free.

The oil firm qualified that “PFC’s performance shows that in an environment where the level playing field is leveled, oil companies or any business for that matter, can thrive.”

The company had in turn blamed persistent smuggling activities as the main factor that had been weighing down sales growth and financial performance of other industry players – especially if they are the ones strictly following industry rules and laws; and paying the right taxes.

For the Petron subsidiary in Subic in particular, it noted that the sales volume had been continuously growing. Conversely, the domestic volume for the rest of parent firm Petron had been on downtrend.

The leading oil firm underscored that “Subic freeport allows locators to engage in healthy competition where players offer prices at almost the same level.”

Nevertheless if taken from the view of markets outside the freeport zones, pricing disparities are manifest at the scale of P10 to P15 per liter depending on the areas of operations of the oil companies, which Petron deemed could have been “a clear indication that smuggled oil continues to flow in various parts of the country.”

On such premise then, the biggest player in the downstream oil sector vowed it “will continue to push for level playing field in the industry, where illicit trade – which deprives the government of much-needed tax collection and consumers of quality products, is not allowed to thrive.”

It similarly asserted that its operation in Subic concretely shows that “deregulation and competition will only truly work if rules on taxation and even product standards are fairly applied to all.”