Inventory
As of end December 2015, actual crudes and petroleum products closing inventory was recorded at 18,006 thousand barrels (MB) or 45-day supply equivalent; 33 days for crude oil and products in country stocks and 12 days in-transit. This was lower by 4.8 percent from December 2014 level of 17,180 MB. YTD December 2015 average inventory was recorded at 44 days, 34 days in country stock and 10 days in-transit
The government continued to enforce the Minimum Inventory Requirement (MIR) given the continuing risks faced by the downstream oil industry sector such as geopolitical instability and supply delivery problems to areas affected by calamities (e.g. typhoon, flood, earthquake, etc.).
Current MIR for refiners is in-country stocks equivalent to 30 days while an equivalent of 15 days stock is required for the bulk marketers and 7 days for the LPG players.
To further enhance security of oil supply in the country, a Memorandum of Agreement with the DOE, the Metro Manila Development Authority (MMDA), Office of Civil Defense (OCD)/The National Disaster Risk Reduction and Management Council (NDRRMC) and members of the PIP was also signed last year which contains the commitments of the entities in ensuring a steady oil supply in the advent of natural disasters.
Crude Oil Supply
Full year 2015 total crude imports reached 78,060 MB, an increase of 20.1 percent from year 2014’s 65,015 MB (Table 2).
About eighty-six percent of the total crude mix (67,855 MB) originated from the Middle East, of which 44.1 percent (34,427 MB) was sourced from Saudi Arabia, the country’s major supplier of crude oil. On the other hand, 5,435 MB of crude oil equivalent to 7.0 percent of the total crude mix was imported from the ASEAN region. The remaining 6.1 percent (4,769 MB) came from Russia and local production (Fig. 1).
Petroleum Product Imports
Petroleum product imports as of end year 2015 totaled 77,934 MB, up by 11.9 percent from end year 2014’s 69,658 MB (Table 3a). This was attributed to the increased import volume of naphtha and condensate, which was used as raw materials for petrochem production and as replacement fuel for natural gas due to scheduled maintenance shutdown of the Malampaya gas facility, respectively.
Vis-à-vis YTD December 2014 level, naphtha and condensate import more than doubled. Fuel oil import also rose by more than a hundred percent. The large increase in volume of fuel oil import was due to decreased production volume of fuel oil since one of the local refiners no longer produced fuel oil as finished products. Hence, other fuel oil requirements of the industry were augmented through imports. On the other hand, kerosene/avturbo and diesel oil imports were down by 15.8 percent and 6.5 percent, respectively. The reason may be due to the soft operation of the newly expanded refinery that produces more white products.
The other industry players accounted for majority of the product imports with 74.6 percent of the total imports volume, up by 52.7 percent to 58,121 MB from YTD December 2014’s 38,062 MB. The oil majors (Petron, Chevron and Pilipinas Shell) accounted for the remaining 25.4 percent which decreased by 37.3 percent from YTD December 2014’s 31,596 MB to 19,814 MB due to high production volume during the period.
The local refiners (Petron and Pilipinas Shell) accounted for 13.7 percent of the total product imports, which included blending stocks, as against 86.3 percent share by direct importers.
Product import mix comprised mostly of diesel oil at 36.4 percent, unleaded gasoline at 19.4 percent, fuel oil at 13.0 percent, LPG at 12.4 percent, naphtha at 8.6 percent, kerosene/avturbo at 7.6 percent, naphtha at 8.6 percent, condensate at 2.1 percent and other products at 0.5 percent share in the total product mix.
Total gasoline import reached 46.1 percent of gasoline demand while diesel oil import was 48.3 percent of diesel demand. LPG import on the other hand, was 65.3 percent of LPG demand. Total product import was 54.4 percent of the total products demand.
The oil majors’ import share in the total demand was 13.8 percent while the other players’ import share was at 40.6 percent. As for the refiners, their import share in the total demand was 7.5 percent, while 40.6 percent was attributed to direct importers.
Meanwhile, a total of 1,954.0 MB ethanol was imported for fuel use in 2015, which dropped by 11.7 percent from 2,213.5 MB of 2014. Republic Act No. 9367 of 2007 mandated that all gasoline to be sold in the country should be E-10 (gasoline with 10% bioethanol content).
Crude Run and Refinery Production
The country’s current maximum working crude distillation capacity is 285 thousand barrels per stream day (MBSD).
Total crude processed as of YTD December 2015 rose by 26.2 percent from 61,372 MB of YTD December 2014 to 77,478 MB. The increment was due to lower refinery utilization last year which was only at 59.0 percent because of extended emergency/ maintenance shutdown of the refineries during that time as compared to YTD December 2015 of 74.4 percent.
Consequently, local petroleum refinery production output also went up by 27.7 percent from 59,301 MB to 75,751 MB. YTD December 2015 average refining output was at 207.5 MB per day.
Volume wise, refinery output of diesel oil grew by 31.0 percent vis-à-vis 2014 level. Unleaded gasoline and kerosene/avturbo also increased by 54.3 and 19.1 percent, respectively. LPG production was also up by 54.4 percent.
As for fuel oil, a decrease of 44.3 percent was recorded since one of the local refiners ceased to produce fuel oil as finished products as cited previously but used the same as raw materials for their other downstream processing units.
Diesel oil continued to dominate the production mix with a share of 38.2 percent, followed by gasoline and kerosene/avturbo with 22.6 and 10.1 percent share, respectively. Next was fuel oil and LPG with shares of 8.4 and 7.0 percent, respectively Fig. 2).
DEMAND
Petroleum Product Demand
YTD December 2015 total demand of finished petroleum products grew by 15.0 percent to 143,226 MB from 124,503 MB of YTD December 2014. This can be translated to an average daily requirement of 392.4 MB compared with last year’s level of 341.1 MB. The growth in the country’s total oil demand was attributed to the entry of additional new players, mostly direct importers and end users plus the increase in utilization of registered end-users (e.g. naphtha of JG Summit and condensate products of First Gas Power).
Compared with FY 2014 figures, gasoline demand posted an increase of 14.8 percent while diesel oil demand rose by 11.5 percent. LPG and kerosene/avturbo also grew by 13.5 and 4.3 percent, respectively. As cited above, naphtha and condensate demand posted large increases in volume vis-à-vis last year (176.6 percent for naphtha and 509.4 percent for condensate). Fuel oil demand also grew by 9.0 percent.
Product demand mix comprised mostly of diesel oil at 41.0 percent, gasoline at 22.9 percent, LPG at 10.4 percent, fuel oil at 10.2 percent, kerosene/avturbo at 9.7 percent, naphtha at 4.1 percent, condensate at 1.1 percent and other products at 0.7 percent share in the total product mix (Fig. 2).
Petroleum Product Exports
Total country’s petroleum products exported for year 2015 increased by 46.3 percent from 9,561 MB of year 2014 to 13,988 MB.
All products exported for the period grew from last year’s level except for condensate which dropped by 14.5 percent due to Malampaya’s maintenance shutdown sometime during the year. Fuel oil posted an increase of 83.5 percent while naphtha export was up by 4.2 percent.
The total export mix comprised of condensate (36.8 percent); fuel oil (28.9 percent); naphtha (18.3 percent); gasoline (16.4 percent); pygas (11.8 percent); propylene (10.0 percent); mixed xylene (7.4 percent); toluene (3.6 percent); benzene (2.1 percent); mixed C4 (0.9 percent) and LPG (0.58 percent).
The oil refiners’ exports accounted for 63.8 percent of the total export mix while the remaining 36.2 percent was accounted to export of other players.
Crude Oil Exports
Year 2015 export of crude oil totaled 2,441 MB from Galoc (Palawan Light) which showed a decrease of 13.8 percent from FY 2014’s 2,833 MB.
MARKET SHARE
Total Petroleum Products
The major oil companies (Petron Corp., Chevron Phils. and Pilipinas Shell Petroleum Corp.) got 60.3 percent market share of the total demand while the other industry players which include PTT Philippine Corp. (PTTPC), Total Phils., Seaoil Corp., TWA, Phoenix, Liquigaz, Petronas, Prycegas, Micro Dragon, Unioil, Isla LPG Corp., Jetti, Eastern Corp., Perdido, SL Harbour, Filoil Energy Co., Petrotrade Phils. Inc., Marubeni, JS Union, JS Phils Corp, South Pacific, as well as the end users who imported directly most of their requirement captured 39.7 percent of the market (Fig. 3).
Meanwhile, the local refiners (Petron Corp. and Pilipinas Shell) captured 53.4 percent of the total market demand while 46.6 percent was credited to direct importers/distributors.
LPG
The other players’ market share, with the inclusion of Isla LPG, increased to 63.8 percent. The remaining 36.2 percent was credited to the oil refiners.
Among the other LPG players, Liquigaz got the biggest market share with a 27.9 percent share, followed by Isla LPG with a share of 13.6 percent. Next was Pryce Gases with a share of 12.1 percent (Fig. 4).
OIL IMPORT BILL
Total country’s YTD December 2015 estimated total oil import bill amounting to $8,701.9 million was down by 36.3 percent from YTD December 2014’s $13,667.6 million. This was attributed to lower import cost (for both crude and petroleum products) although import volume increased.
Total oil import cost was made up of 53.5 percent finished products and 46.5 percent crude oil.
Total import of crude oil which amounted to $4,043.1 million dropped by 35.0 percent from $6,221.3 million of YTD December 2014, due to lower CIF price per barrel from 2014’s $95.69./bbl to $51.795/bbl.
Meanwhile, total product import cost declined by 37.4 percent to $4,658.8 million at an average CIF cost of $59.778/bbl vis-à-vis 2014’s $7,446.3 million at an average CIF cost of $106.898/bbl. Average dollar rate for YTD December 2015 is P44.36 compared to YTD December 2014’s average rate at P44.4.
On the other hand, the country’s petroleum exports earnings for the period fell by 29.0 percent from $1,237.3 million to $878.7 million in YTD December 2014.
Overall, the country’s FY 2015 net oil import bill amounting to $7,823.2 million was down by 37.1 percent from FY 2014’s $12,430.3 million due to cheaper price per barrel of crude and petroleum products (about 45.0 percent) vis-à-vis last year.