Petron Books P3.8B Net Income in H1 2026, Down 27%

Petron Corporation, the Philippines' leading oil refiner and retailer, has reported a 27% year-on-year decline in its net income for the first six months of 2026, reaching P3.8 billion. The company attributed this drop primarily to the sustained impact of geopolitical tensions in the Middle East, which drove crude oil prices, import premiums, and freight costs to record highs. The global oil market has remained highly volatile following the onset of the US-Iran conflict. Benchmark Dubai crude prices, after peaking at $129 per barrel in March, fell to $79 in June. However, the average for the second quarter rose to $96 per barrel from $86 in the first quarter. Consequently, the average for the first half of the year stood at $91 per barrel, a 27% increase from the previous year. Despite the profit decline, Petron's consolidated sales volume rose by 6% to 67.9 million barrels. This growth was largely driven by an 86% surge in trading transactions by its Singapore subsidiary. This more than offset a 6% decrease in the combined sales volume of Petron's operations in the Philippines and Malaysia, which totaled 52.9 million barrels. While Petron's retail fuel segment in the Philippines posted a strong 15% growth, its overall sales volume was affected by reduced refining output. This was due to a temporary production shutdown at the Port Dickson Refinery in Malaysia and scheduled first-quarter maintenance at the Petron Bataan Refinery in Limay. Petron's revenues, however, jumped 57% to P605.9 billion in the first half, compared to the same period last year. This surge was on account of higher prices and improved sales volumes. Nevertheless, the higher cost of products sold and increased operating expenses put pressure on the company's margins, resulting in an operating income of P12.6 billion, down 17% year-on-year. Construction of a replacement jetty at the Port Dickson Refinery is underway and on track for commissioning in the first quarter of 2027. Petron has commenced limited and intermittent refining operations in Malaysia to process existing crude inventory and support market product availability. "While the first half of the year has been challenging, we are confident that our financial discipline, operational resilience, and competitive strengths will enable us to navigate these temporary headwinds. We remain focused on delivering on our commitment to ensure fuel security and meet the nation’s fuel demand amid the continued market volatility," said Petron chairman and CEO Ramon Ang. The company is also nearing completion of its coco-methyl ester (CME) plant in the Philippines, with an annual capacity of 180,000 tons. Situated within the Petron Bataan Refinery complex, it will provide a more reliable CME supply for the country's sole remaining refiner. Petron is expanding its terminal storage capacity to improve supply reliability and operational efficiency. Plans include building four new storage tanks in Limay by early 2028, including one for jet-A1 and three for CME. In Bacolod, a 1,500-MT LPG mounded tank and an LPG canister filling facility are targeted for completion in the third quarter of 2028. Source: GMA Money Philippines