SUPPLY

Inventory

As of end-month June 2018, actual crudes and petroleum products inventory closed at 21,844 thousand barrels (MB) or 46-day supply equivalent; 38 days for crude oil and products in country stocks and 8 days in-transit.  This was lower by 12.1 percent from June 2017’s 24,854 MB or 51-day supply equivalent. 

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.

Further, in response to the on-going rehabilitation of Marawi City, the Department continuously monitors the bulk oil supply status in Mindanao to ensure continuous and adequate supply of petroleum products in the area.

Moreover, when RA 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN Law) took effect on 1 January 2018, the Department issued a directive to oil companies that old stocks (December 31, 2017 inventory) should be sold on the old excise rate or at zero rate tax for diesel product. Hence, the DOE monitored the oil companies daily withdrawals of petroleum products on a per depot basis until the old stocks were exhausted to ensure proper implementation of the new  tax scheme. 

Crude Oil Supply

Total crude oil import for the period reached 41,747 MB, an increase of 15.9 percent from 36,016 MB of 1H 2017.   

About ninety percent of the total crude mix (37,497 MB) was sourced from the Middle East, of which 37.7 percent (15,754 MB) came from Saudi Arabia, the top supplier of crude oil into the country. Next is Kuwait with a 24.6 percent share of the total crude mix, followed by UAE, Qatar and Oman with 18.6, 6.2 and 2.6 percent share, respectively. On the other hand, a total of 401 MB was imported from the ASEAN Region (350 MB) and from local production (51 MB). Also, 3,849 MB of crude oil was sourced from Russia which is equivalent to 8.4 percent share of the total crude mix. The remaining 0.9 percent was from Taiwan (319 MB) and South Korea (31 MB) (Fig. 1).                         

Petroleum Product / Ethanol Imports

First half 2018 petroleum product imports totaled 45,403 MB, a decrease of 6.1 percent from first half 2017’s 48,348 MB.

The top imported product for the period was diesel oil which dropped by 8.3 percent from last year’s level. Gasoline imports also decreased by 3.7 percent. Meanwhile, fuel oil and kerosene/avturbo also fell by 17.8 and 7.7 percent, respectively.  However, LPG import was up by 2.2 percent vis-à-vis last year’s level.

The other industry players accounted for majority of the product imports with 76.5 percent of the total imports volume, down by 1.4 percent to 34,735 MB from first half 2017’s 35,243 MB.  The oil majors (Petron, Chevron and Pilipinas Shell) accounted for the remaining 23.5 percent which declined by 18.6 percent from last year’s 13,104 MB to 10,668 MB.

 The local refiners (Petron and Pilipinas Shell) accounted for 11.4 percent of the total product imports, which included blending stocks, as against 88.6 percent share by direct importers.

Product import mix comprised mostly of diesel oil at 39.8 percent, gasoline at 17.8 percent, LPG at 15.3 percent, kerosene/avturbo at 10.1 percent, fuel oil at 6.0 percent and other products at 11.1 percent share in the total product mix.

Total gasoline import reached 41.1 percent of gasoline demand while diesel oil import was 51.5 percent of diesel demand.  LPG import on the other hand, was 70.5 percent of LPG demand.  Total product import was 54.3 percent of the total products demand.  

The oil majors’ import share in the total demand was 12.8 percent while the other players’ import share was at 41.5 percent.  As for the refiners, their import share in the total demand was 6.2 percent, while 48.1 percent was attributed to direct importers.

Meanwhile, a total of  915 MB ethanol was imported for fuel use during the period which grew by 23.9 percent from 739 MB of last year’s level (Table 3f).  Republic Act No. 9367 of 2006 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 285.2 thousand barrels per stream day (MBSD).

As of 1H 2018, the local refiners  processed 41,639 MB of various type of crude oil (Table 5), an increase of 13.8 percent vis-à-vis 1H 2017’s 36,578 MB. Refinery utilization during the period was at 80.7 percent.

Consequently, local petroleum refinery production output was also up by 14.2 percent from 36,246 MB of 1H 2017  to 41,385 MB.  First Half 2018 average refining output was at 228.6 MB per day.

Fuel oil and diesel oil output increased by 17.8 and 17.7 percent, respectively. Similarly, LPG, gasoline and kerosene/ avturbo output grew by 15.8, 10.9 and 5.4 percent, respectively.

Diesel oil continued to dominate the production mix with a share of 37.9 percent, followed by gasoline and kerosene/avturbo with 24.2 and 9.5 percent shares, respectively.  Meanwhile, LPG and fuel oil got 7.1 and 6.3 shares, respectively (Fig. 2).        

DEMAND

Petroleum Product Demand

First half 2018 demand of petroleum products totaled 83,621 MB, an increase of 1.6 percent from 82,277 MB of first half 2017. This can be translated to an average daily requirement of 462.0 MB compared with last year’s level of 454.6 MB.  

Compared with 1H 2018 figures, diesel oil demand was up by 5.0 percent. Similarly, demand of LPG and gasoline increased by 10.6 and 2.4 percent, respectively. However, fuel oil demand dropped by 10.9 percent.

Product demand mix comprised mostly of diesel oil at 42.0 percent, gasoline at 23.4 percent, LPG at 11.8 percent, kerosene/ avturbo at 10.5 percent, fuel oil at 5.9 percent  and other products at 5.8 percent share in the total product mix (Fig. 2).

Petroleum Product Exports

Total country’s petroleum products exports as of 1H 2018 rose by 33.2 percent from 5,920 MB of 1H 2017 to 7,888 MB.

Vis-à-vis last year, condensate, the top exported product for the period increased by 43.7 percent. Gasoline, toluene and mixed C4 exports also rose by 49.8, 40.8 and 18.7 percent, respectively. Meanwhile, 782 MB of fuel oil and 192 MB of reformate were exported this year versus nil export of first half last year.

The total export mix comprised of condensate (26.7 percent); propylene (12.4 percent); gasoline (11.4 percent); naphtha (10.7 percent); pygas (10.4 percent); fuel oil (9.9 percent); mixed C4 (7.0 percent); mixed xylene (4.6 percent); toluene (3.1 percent; reformate (2.4 percent); benzene (1.4 percent); and LPG (0.1 percent).

The oil refiners’ exports accounted for 55.9 percent of the total export mix while the remaining 44.1 percent was accounted to export of other players.  

Crude Oil Exports

A total of 690 MB crude oil from Galoc (Palawan Light) was exported during the period which decreased by 1.9 percent from 1H 2017’s 704 MB.

MARKET SHARE

Total Petroleum Products

The major oil companies (Petron Corp., Chevron Phils. and Pilipinas Shell Petroleum Corp.) got 53.4 percent market share of the total demand  while the other industry players which include PTT Philippine Corp. (PTTPC),  Total Phils., Seaoil Phil. Inc., TWA Inc. , Phoenix, Liquigaz, Petronas, Prycegas, Micro Dragon, Unioil, Isla Gas, Jetti, Eastern Petroleum, JS Union, JS Phils. Corp., Petrotrade, South Pacific, Marubeni, SL Harbour, Rockoil, RK3 Int’l., Insular, ERA 1, High Glory, Warbucks, Perdido and Filoil Logistics Corp.,  as well as the end users who imported directly most of their requirement captured 46.6 percent of the market (Fig. 3).

Meanwhile, the local refiners (Petron Corp. and Pilipinas Shell) captured 45.6 percent of the total market demand while 54.4 percent was credited to direct importers/end-users.

LPG

The other players’ market share, with the inclusion of South Pacific in 2016, increased to 70.8 percent.  The remaining 29.2 percent was credited to the oil refiners.

Petron’s share was 28.9 percent of the total LPG demand while among the other LPG players, Liquigaz got the biggest market share with a 22.9 percent share. This was followed by South Pacific, Inc. (SPI) with a share of 14.1 percent.  Next were Isla Gas and Prycegases with shares of 12.3 and 11.3 percent, respectively (Fig. 4).

OIL IMPORT BILL

First half 2018 estimated total oil import bill amounting to $6,311.8 million was up by 34.4 percent from first half 2017’s $4,695.3 million.  This was attributed to the combined effects of higher import cost and increased import volume of crude oil vis-à-vis last year.  

Total oil import cost was made up of 53.8 percent finished products and 46.2 percent crude oil.

Total import of crude oil amounted to $2,915.1 million, grew by 54.0 percent from $1,892.9 million of first half  2017 due to higher CIF price per barrel from 1H 2017’s $52.559/bbl to $69.827/bbl.  

Meanwhile, total product import cost was up by 21.2 percent or $3,396.7 million at an average CIF cost of $74.812/bbl vis-à-vis 1H 2017’s $2,802.3 million at an average CIF cost of $57.962/bbl. The increase was attributed to higher import cost this year and increase in the volume of total imports.   

Average dollar rate for 1H 2018 is $51.974 compared to 1H 2017’s average rate of $49.928.

On the other hand, the country’s petroleum exports earnings for the period rose by 51.5 percent from $417.8 million in 1H 2017 to $633.1 million this year.  

Overall, the country’s 1H 2018 net oil import bill amounting to $5,678.8 million was up by 32.8 percent from 1H 2017’s $4,277.4 million.