Small oil players target 50% market share in 5 years

MANILA, Philippines - The country’s small oil firms are eyeing to corner half of the market within the next five years from their prevailing market share of 25 to 30 percent, the Independent Philippine Petroleum Companies Association (IPPCA) said.

IPPCA chairman Fernando Martinez said with strong economic growth, independent oil players are poised to capture a bigger share of the market.

“The market is growing. Fifty percent in the next five years is realistic,” he said.

The Big Three players – Pilipinas Shell Petroleum Corp., Petron Corp. and Chevron – account for roughly 70 percent of the market.

But Martinez said with more businesses likely to open up and expand this year on the back of a growing economy, the petroleum business is also expected to expand.

“Business will grow along with the economy,” he said.

The National Economic and Development Authority (NEDA) has reported that the Philippine economy grew 6.6 percent last year, surpassing the five to six percent target in 2012.

This year, the government expects the economy to grow six to seven percent.

Martinez said independent oil firms managed to grow the market by two percent to three percent every year, starting with three percent in 1998 after the industry was liberalized through the passage of the Downstream Oil Deregulation Act in 1997. The law opened up the industry and allowed the entry of new oil players.

Most independent oil firms cater to the “D-E-F” markets with small service stations that cater to motorcycle, tricycle, taxi drivers and jeepneys.

IPPCA has at least 16 members composed of the country’s leading independent oil players such as Eastern Petroleum, Unioil Petroleum Philippines Inc., Seaoil Philippines, Flying V, City Oil, Pryce Gases, and LPGMA, among others.

With the expected growth in the market, Martinez urged the Department of Energy to impose stricter retail rules and safety standards for gasoline stations and other petroleum outlets.