SUPPLY

• Inventory

As of end-month June 2019, actual crudes and petroleum products inventory closed at 17,273 thousand barrels (MB) or 37-day supply equivalent; 24 days for crude oil and 13 days for products in country stocks.  This was lower by 21.0 percent from June 2018’s 21,865 MB due to  decrease in volume of crude oil imported for the period.

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.

• Crude Oil Supply

YTD June 2019 imports of crude oil fell by 30.2

percent vis-à-vis YTD June 2018’s 42,760 MB.  The drop was attributed to the emergency and scheduled maintenance/ turnaround of one of the local refinery sometime in April of this year which resulted to increased imports of finished petroleum products to augment supply. 

Majority of the crude oil imports were sourced from the Middle East (73.9%), of which 32.2 percent came from UAE (9,624 MB), replacing Saudi Arabia as top supplier of crude oil into the country.  Kuwait was next with a 26.3 percent share of the total crude mix, followed by Russia and Saudi Arabia with 14.5 and 12.2 percent share, respectively.  On the other hand, 9.3 percent  of the crude import mix originated from the

ASEAN Region (2,783 MB) and 0.1 percent from local production (32 MB). The remaining 2.2 percent were from Australia (520 MB), Taiwan (80 MB) and  South Korea (57 MB) (Fig. 1). 

• Petroleum Product Imports

Total country’s first half 2019 petroleum product imports grew by 19.5 percent from 48,129 MB of YTD June 2018 to 57,497 MB.  This was due to the decreased in production volume of the oil refiners.   

The top imported product for the period was diesel oil with an increase of 30.3 percent from 18,609 MB to 24,253 MB this year. Gasoline import was also up by 19.6 percent from 9,353 MB to 11,182 MB.  Likewise,  LPG imports grew by 17.9 percent from 6,972 MB to 8,221 MB.  Kerosene/avturbo imports also increased by 27.7 percent vis-à-vis last year’s level.  On the other hand, fuel oil import was down by 19.3 percent vis-à-vis last year’s level.

The other industry players import volume of 36,716 MB which accounted majority or 63.9 percent of the total imports volume was slightly up by 0.02 percent from last year’s 36,709 MB.  The oil majors (Petron, Chevron and Pilipinas Shell) accounted for the remaining 36.1 percent or 20,781 MB which increased by 82.0 percent from last year’s 11,419 MB. 

The local refiners (Petron and Pilipinas Shell) accounted for 26.4 percent of the total product imports, which included blending stocks, as against 73.6 percent share of the direct importers.        

Product import mix comprised mostly of diesel oil at 42.2 percent, gasoline at 19.4 percent, LPG at 14.3 percent, kerosene/avturbo at 10.7 percent, fuel oil at 4.4 percent and other products at 8.9 percent share in the total product mix.

Total gasoline import reached 52.0 percent of gasoline demand while diesel oil import was 65.3 percent of diesel demand.  LPG import on the other hand, was 81.3 percent of LPG demand.  Total product import was 65.5 percent of the total products demand. 

The oil majors’ import share in the total demand was 23.7 percent while the other players’ import share was at 41.8 percent.  As for the refiners, their import share in the total demand was 17.3 percent, while 48.2 percent was attributed to direct importers.

Meanwhile, the total 533 MB ethanol imported for fuel use during the period dropped by 27.8 percent from 739 MB of  YTD June 2018.  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). Refinery utilization during the period was at 78.9 percent vis-à-vis last year’s level of 86.3 percent. 

With some parts of Luzon and Metro Manila jolted by earthquake sometime in April 2019, one of the local refiners implemented one week ahead of schedule its regular total plant shutdown for  maintenance work to assess possible damage caused by the earthquake.  This resulted to a decrease in volume of crude processed at the refinery for the first half of 2019 by 26.0 percent from 41,639 MB of YTD June 2018 to 30,806 MB this year.

Consequently, local petroleum refinery production output dropped by 27.2 percent to 30,123 MB from 41,385 MB of first half 2018.  Average refining output was at 166.4 MB per day.

Vis-a-vis last year’s level, LPG and diesel oil output decreased by 38.3 and 25.7 percent, respectively. Similarly, gasoline, kerosene/ avurbo and fuel oil output dropped by 24.8, 16.6 and 11.7 percent, respectively. 

Diesel oil continue to dominate the production mix with a share of 38.7 percent, followed by gasoline and kerosene/avturbo with 25.0 and 10.9 percent shares, respectively.  Meanwhile, LPG got 6.0 shares and fuel oil had 7.6 shares (Fig. 2).

DEMAND

• Petroleum Product Demand

YTD June 2019 demand of petroleum products totaled  87,790 MB, an increase of 4.5 percent from 83,977 MB of same level last year. This can be translated to an average daily equirement of 485.0 MB compared with last year’s level of 464.0 MB. 

Compared with first half 2018 figures, gasoline and diesel oil demand increased by 9.5 and 5.2 percent , respectively.  Similarly, demand of LPG and kerosene/avturbo grew by 2.8 and 1.8 percent, respectively. However, fuel oil demand dropped by 2.0 percent.

Product demand mix comprised mostly of diesel oil at 42.3 percent, gasoline at 24.5 percent, LPG at 11.5 percent, kerosene/ avturbo at 10.3 percent, fuel oil at 5.5 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 first half 2019 was down by 24.2 percent  from 7,890 MB of first half 2018 to 5,978 MB this year.

Vis-à-vis YTD June 2018, condensate, the top exported product for the period increased by 15.4 percent. Likewise, pygas export was up by  4.1 percent.  Diesel oil and asphalts were also exported this period vis-à-vis nil export of same level last year.  On the other hand, fuel oil and naphtha exports dropped by 54.9 and 37.6 percent, respectively. Other petrochem products such as propylene, toluene, benzene also decreased from last year’s level.

The total export mix comprised of condensate (40.6 percent); pygas (14.3 percent); naphtha (8.8 percent); mixed C4 (8.1 percent); fuel oil (5.9 percent); gasoline (5.2 percent); propylene (5.1 percent);); mixed xylene (4.4 percent); diesel (3.0 percent); asphalts (1.9 percent); toluene (1.6 percent); benzene (0.7 percent); reformate (0.4 percent); and LPG (0.02 percent).

The other players’ exports accounted 63.0 percent of the total export mix while the remaining 37.0 percent was accounted to export of the oil refiners. 

• Crude Oil Exports

A total of 686 MB crude oil from Galoc (Palawan Light) was exported to South Korea, a slight drop of 0.6 percent from first half of 2018’s 690 MB.

MARKET SHARE 

• Total Petroleum Products

The major oil companies (Petron Corp., Chevron Phils. and Pilipinas Shell Petroleum Corp.) got 50.2 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, Prycegas, Micro Dragon, Unioil, Isla Gas, Jetti, Eastern Petroleum, Petrotrade, South Pacific, Marubeni, SL Harbour, Rockoil, RK3 Int’l., Insular, ERA 1, High Glory, Warbucks, Perdido, Golden Share and Filoil Logistics Corp.,  as well as the end users who imported directly most of their requirement captured 49.8 percent of the market (Fig. 3).

Meanwhile, the local refiners (Petron Corp. and Pilipinas Shell) captured 42.6 percent of the total market demand while 57.4 percent was credited to direct importers/end-users.

• LPG

The other players’ market share was 70.7 percent while the remaining 29.3 percent was credited to the oil refiners.

Petron’s share was 29.05 percent of the total LPG demand while among the other LPG players, Liquigaz got the biggest market share with a 21.6. percent share. This was followed by South Pacific, Inc. (SPI) with a share of 16.4 percent.  Next were Isla Gas and Prycegases with shares of 12.9 and 10.6 percent, respectively (Fig. 4).  

OIL IMPORT BILL

First half 2019 estimated total oil import bill amounting to $6,053.0 million was down by 8.3 percent from first half 2018’s $6,597.3 million. This was attributed to the combined effects of lower import cost and decreased volume of crude imported vis-à-vis last year’s level. Total oil import cost was 33.6 percent finished products and 66.4 percent crude oil.

Total import of crude oil amounted to $2,033.8 million, is a drop of 32.0 percent from $2,992.9 million of a year ago level due to lower import volume and CIF price per barrel from YTD June 2018’s $69.993/bbl to $66.267/bbl.

Meanwhile, total product import cost was up by 11.5 percent to $4,019.2 million at an average CIF cost of $69.903/bbl vis-à-vis first half of 2018’s $3,604.4 million at an average CIF cost of $74.89/bbl

On the other hand, the country’s petroleum exports earnings for the period fell by 33.4 percent from $630.4 million last year to $420.0 million this year. 

Overall, the country’s net oil import bill amounting to $5,633.0 million is a decrease of 5.6 percent from YTD June 2018’s $5,966.9 million.

Average dollar rate for YTD June 2019 is $52.19 compared to YTD June 2018’s average rate of $51.97.