From a temporary collapse when enhanced community quarantine (ECQ) was enforced in the country, the downstream oil industry is now seeing green shoots of recovery although this is coming at a very moderate pace.
Fernando L. Martinez, chairman of the Independent Philippine Petroleum Companies Association (IPCCA) indicated that the industry suffered extreme demand plunge of up to 70-percent during the lockdown period; then that eased to 40-percent as the quarantine restrictions were gradually easing.
And as movement restrictions loosened up further to the general community quarantine (GCQ) phase, demand recovery escalated further mollifying previous slump by 30-percent or increasing the industry’s recovery rate to 70-percent.
Toward the yearend, Martinez noted that oil demand may reach as high as 80-percent by end-October, but that will still depend on further re-opening of the economy that the government will be enforcing.
The chair of the aggrupation of the independent oil players expressed reservation though if the industry could reach comparable volume logged in 2019; given that the sector still grapples with the economic jolt posed by the pandemic.
And while sales are now on continuing rebound, Martinez sets out prognosis that the inauspicious scenario for the industry may linger until 2022.
Primarily for oil firms that have been heavily catering to the needs of the airlines industry, it is anticipated that the grim scenario of volume nosedive may stay a bit longer; as travel restrictions are still pervasive due to the differing safety protocols carried out not just among local governments in the Philippines; but also the enforcements of various countries.
The aviation sector had been badly hit in the past months; and until now, travel restrictions all over the world still limit mobility, hence, prolonging the downcast milieu in the industry.
Based on Department of Energy (DOE) data, product volume sales in January were still at record-high levels; with gasoline reaching 306.345 million liters; diesel at 340.205 million liters; kerosene at 4.77 million liters; and jet fuel at 156.877 million liters.
In March, when the lockdown started in the country at mid-month, sales downturn was immediately felt by the sector; with gasoline volume pared to 78.864 million liters; diesel down to 268.727 million liters; jet fuel trimmed to 122.089 million liters; although kerosene volumes had been roughly steady.
Further in April and May, the industry’s nightmare worsened as travel restrictions held on; and that was the time when the oil companies saw their top and bottom lines literally crumbling because of the 60 to 70-percent demand crash on fuel commodities.