Pilipinas Shell in Tabangao, Batangas Refinery is shutting down shuts down for a new world-class import terminal development
Dubbed as a “world-class full import terminal,” the Tabangao oil refinery constructed in 1960 has been an important refinery center for the last 100 years of operating in the Philippines.
Shell Philippines President and CEO Cesar G. Romero said that the company “has the technical capability and flexibility to manage and adapt to disruptive conditions.”
“Due to the impact of the Covid-19 pandemic on the global, regional and local economies, and the oil supply-demand imbalance in the region, it is no longer viable for us to run the refinery,” Romero added.
Pilipinas Shell is a subsidiary of Royal Dutch Shell which suffered a P5.5 billion net loss in the first quarter of this year because of the pandemic crisis.
The company has long considered upgrading its portfolio for a more lucrative and sustainable format, as many things have been changing.
The shift in supply chain strategy from manufacturing to full import terminal is a move that will further strengthen Pilipinas Shell’s financial ability, despite the changes happening in the global refining industry.
Pilipinas Shell first suspended its refinery operations on May 24 this year, albeit that was intended to be temporary then. And while it considered such a “tough decision” at that time, it was manifestly a precursor event to the final reckoning to ultimately cease its oil refining venture.
Will it affect local gasoline prices?
As culled from the Department of Energy (DOE) data, demand for petroleum products in the country had plummeted by 20 to 30-percent in March; and further crashed to 60 to 70-percent in April because of the enhanced community quarantine (ECQ).
To add to that, fuel aviation sunk to a low 43 percent and retail gasoline shop experienced a significant decline in sales as well.
“Pilipinas Shell has been here for more than 100 years and we’re here for the long haul. We are with you in life journeys,” Mr. Romero said. Keeping in mind the welfare of its customer—for the long run.