Petron in the red by P2 B this year

Industry leader Petron Corp. is in the red by P2 billion and its losses are still mounting due to its inability to raise its prices, Energy Secretary Mario V. Tiaoqui said yesterday.

In a radio interview, Tiaoqui pointed out that the prices of Dubai crude have increased by more than 200 percent since March 1999 while local oil companies were able to raise their pump prices by just a little over 60 percent over the same period.

In a recent report, Petron said it lost P1.5 billion in the first nine months and another P200 million in October alone.

Petron, which is owned 40 percent by the government, reported a net earnings of P2.4 billion. In 1999, one of its lowest. This year, it did not declare a stock nor cash divided due to the continued losses it registered.

The oil companies including Petron last increased their prices on Oct. 1. Since that time, the prices of crude oil increased by a little over $2 per barrel while the peso deteriorated to new record lows.

Tiaoqui said government understands the predicament of the oil companies, but government also needed to keep prices at present levels to avoid complicating the already confusing political environment.

He explained that government had tried to make "things easier" for the industry by lowering the three-percent import tariffs on crude oil and refined petroleum products for a period of three months. Congress is working on a legislative proposal that would lower specific taxes on petroleum products likewise in a bid to keep prices depressed.