Gullas says Congress won't allow Petron buyback

CEBU, Philippines — House Assistant Majority Leader and Cebu First District Representative Eduardo Gullas said that business tycoon Ramon Ang can keep Petron Corporation as Congress would never bankroll a government takeover of the country’s only oil refiner.

“Thanks, but no thanks,” said Gullas in a statement as he also rejects government buyout of Shell’s 45 percent operating stake in Malampaya gas project.

“We in Congress won’t allow the government to buy Petron back for the same reason that we won’t allow the state-run Philippine National Oil Co. to acquire Shell B.V.’s 45 percent operating stake in the Malampaya gas project,” Gullas said.

The veteran legislator said the government neither has the money nor the operational flexibility to run extremely costly and inherently risky oil and gas undertakings that are best left to highly agile private corporations.

Gullas said that Petron, which has an 18.6 percent share of the local petroleum market, reported a net loss of P11.4 billion in 2020, when the COVID-19 pandemic destroyed the demand for fuel products.

The oil refiner, he said, has since bounced back reporting a net income of P5 billion from January to September this year.

“As to Malampaya, it is enough that the government is benefiting financially from the gas project without assuming any financial risks,” Gullas pointed out.

Gullas added that the government receives 60 percent of the net proceeds from Malampaya’s petroleum operations with the 40 percent going to the contractors.

He said that on top of the government’s share, PNOC also gets a portion of the money that goes to the Malampaya contractors, because PNOC has a 10 percent stake in the service contract.

Gullas said the only business that the State should go into now is the business of providing public transportation, particularly passenger and cargo railways.

“This is because sound transportation investments lower the costs of moving people and goods, improve productivity and foster long-term economic growth as well as job expansion,” Gullas further said. —GMR (FREEMAN)