SUPPLY

Inventory

June 2017 actual crudes and petroleum products inventory closed at 24,854 thousand barrels (MB) or 56-day supply equivalent; 37 days for crude oil and products in country stocks and 19 days in-transit.  This was higher by 24.6 percent from June 2016 level of 19,953 MB. 1H 2017 average inventory was recorded at 47 days, 38 days in country stock and 9 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.

As such, the status of oil supply and facilities in Surrigao and Batangas which was hit by more than 5.0-magnitude earhquake was monitored and reported to ensure continuous supply.

Crude Oil Supply

The country imported various types of crude oil in the first  half of 2017 which reached 35,759 MB, a decrease of 5.7 percent from 37,940 MB of last year’s level.   

Around eighty six percent of the total crude mix (30,909 MB) was sourced from the Middle East, of which 34.9 percent (12,463MB) came from Saudi Arabia, the top supplier of crude oil into the country.  Next is Kuwait with a 28.4 percent share of the total crude mix, followed by UAE with a 15.6 percent share. On the other hand, 9.8 percent (3,504 MB) of crude oil was imported from Russia and Japan, while 2.8 percent  (1,000 MB) was from Australia.  The remaining 1.0 percent was sourced from the ASEAN (286 MB) and from local production (60 MB) (Fig. 1).                       

Petroleum Product / Ethanol Imports

First half 2017 petroleum product imports totaled 48,592 MB, an increase of 9.6 percent from 1H 2016’s 44,352 MB.  

The top imported product for the period was diesel oil which grew by by 3.9 percent from last year’s level. LPG import also rose by 24.7 percent. Likewise, kerosene/avturbo and gasoline increased by 21.3 and 7.1 percent, respectively.  However, fuel oil import went down by 9.5 percent compared with 1H 2016 import.   

The other industry players accounted for majority of the product imports with 72.5 percent of the total imports volume, up by 11.7 percent to 35,230 MB from 1H 2016’s 31,544 MB.  The oil majors (Petron, Chevron and Pilipinas Shell) accounted for the remaining 27.5 percent which increased by 4.3 percent from last year’s 12,808 MB to 13,361 MB. 

The local refiners (Petron and Pilipinas Shell) accounted for 18.0 percent of the total product imports, which included blending stocks, as against 82.0 percent share by direct importers.        

Product import mix comprised mostly of diesel oil at 40.4 percent, gasoline at 17.9 percent, LPG at 13.9 percent, kerosene/avturbo at 10.2 percent, fuel oil at 6.8 percent and other products at 10.8 percent share in the total product mix.

Total gasoline import reached 45.8 percent of gasoline demand while diesel oil import was 58.9 percent of diesel demand.  LPG import on the other hand, was 76.2 percent of LPG demand.  Total product import was 59.9 percent of the total products demand. 

The oil majors’ import share in the total demand was 16.5 percent while the other players’ import share was at 43.5 percent.  As for the refiners, their import share in the total demand was 10.8 percent, while 49.1 percent was attributed to direct importers.

Meanwhile, a total of  788 MB ethanol was imported for fuel use during the first half of the year which grew by 7.5 percent from 733 MB of 1H 2016.  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).

Moreover,  butane in canisters (90.1 MT). was also imported during the first half of 2017.

Crude Run and Refinery Production

Total crude processed as of 1H 2017 was down by 7.6 percent from 39,580 MB of 1H 2016 to 36,578 MB. Refinery utilization during the period also decreased from last year’s 76.3 percent to 70.5 percent this quarter. The drop may be due to the extended maintenance shutdown and turn around schedule of the local refineries, sometime during the first half of the year.

Consequently, local petroleum refinery production output also went down by 7.1 percent from 39,036 MB to 36,246 MB.  1H 2017 average refining output was at 200.3 MB per day.

Diesel oil output went down by 9.9 percent while kerosene/avturbo output drop by 8.9 percent. Similarly, gasoline and LPG output decreased by 4.4 and 0.7 percent, respectively.  Fuel oil also declined by 26.3 percent. On the otherhand, petrochem products outputs increased during the same period.

Diesel oil continued to dominate the production mix with a share of 36.8 percent, followed by gasoline and kerosene/avturbo with 24.9 and 10.3 percent shares, respectively.  Meanwhile, LPG and fuel oil got 7.0 and 6.1 shares, respectively (Fig. 2).

DEMAND

Petroleum Product Demand

Total demand of petroleum products for the first half of 2017 totaled 81,061 MB, an increase of 2.6 percent from 78,989 MB of first half 2016. This can be translated to an average daily requirement of 447.9 MB compared with last year’s level of 434 MB. 

Compared with YTD June of 2016 figures, Kerosene/avturbo demand posted an increase of 18.6 percent. LPG and gasoline demand were also up by 14.2 and 5.3 percent, respectively. However, fuel oil and diesel demand decreased by 31.3 and 0.9 percent, respectively.

Product demand mix comprised mostly of diesel oil at 41.2 percent, gasoline at 23.4 percent, kerosene/avturbo at 11.3 percent, LPG at 11.0 percent, fuel oil at 6.5 percent  and other products at 6.8 percent share in the total product mix (Fig. 2).

Petroleum Product Exports

Total country’s petroleum products export as of 1H 2017 grew by 79.9 percent from 3,291 MB of 1H 2016 to 5,920 MB.

Vis-à-vis last year, condensate was the top exported products for the period, with a growth of 78.5 percent. Naphtha also rose by more than 200 percent. Likewise, other petrochem products such as propylene, mixed xylene, toluene and benzene export increased which may be due to higher international demand. On the other hand, gasoline export went down by 26.9 percent.

The total export mix comprised of condensate (24.7 percent); naphtha (15.5 percent); propylene (15.1 percent); pygas (14.1 percent); gasoline (10.1 percent); mixed C4 (7.9 percent); mixed xylene (7.5 percent); toluene (2.9 percent); benzene (1.8 percent) and LPG (0.38 percent).

The oil refiners’ exports accounted for 53.3 percent of the total export mix while the remaining 46.7 percent was accounted to export of other players.. 

Crude Oil Exports

A total of 704 MB crude oil from Galoc (Palawan Light) was exported during the first half of 2017 which decreased by 37.0 percent from first half of 2016’s 1,117 MB.

MARKET SHARE

Total Petroleum Products

The major oil companies (Petron Corp., Chevron Phils. and Pilipinas Shell Petroleum Corp.) got 56.0 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, Perdido and Filoil Logistics Corp.,  as well as the end users who imported directly most of their requirement captured 44.0 percent of the market (Fig. 3).

Meanwhile, the local refiners (Petron Corp. and Pilipinas Shell) captured 49.3 percent of the total market demand while 50.7 percent was credited to direct importers/end-users.

LPG

The other players’ market share, with the inclusion of South Pacific last year, increased to 68.3 percent.  The remaining 31.7 percent was credited to the oil refiners.

Among the other LPG players, Liquigaz got the biggest market share with a 23.6 percent share, followed by Pryce Gases with a share of 12.8 percent.  Next were South Pacific, Inc. (SPI) and Isla Gas with equal share of 12.1 percent, respectively (Fig. 4).      

OIL IMPORT BILL

1H 2017 estimated total oil import bill amounting to $4,689.6 million was up by 37.1 percent from 1H 2016’s $3,421.1 million.  This was attributed to the cpmbined effects of higher import cost and higher  volume of imports. 

Total oil import cost was made up of 60.1 percent finished products and 39.9 percent crude oil.

Total import of crude oil amounted to $1,871.3 million, grew by 30.3 percent from $1,435.6 million of 1H 2016 due to higher CIF price per barrel from 1H 2016’s $37.838/bbl to $52.330/bbl. 

Meanwhile, total product import cost was up by 41.9 percent to $2,818.4 million at an average CIF cost of $58.001/bbl vis-à-vis 1H 2016’s $1,985.5 million at an average CIF cost of $44.768/bbl. The increase was attributed to higher import cost this year and increased in the volume of product imports.   Average dollar rate for 1H 2017 is $49.93 compared to 1H 2016’s average rate of $46.90.

On the other hand, the country’s petroleum exports earnings for the period rose by 31.6 percent from $317.2 million of 1H 2016 to $417.4 million this year.  This was due to increased FOB per barrel vis-à-vis 2016 figures from $38.460/bbl to $55.753/bbl.

Overall, the country’s 1H 2017 net oil import bill amounting to $4,272.2 million was up by 37.6 percent from 1H 2016’s $3,103.9 million.