SUPPLY

Inventory

December 2016 actual crudes and petroleum products inventory closed at 20,742 thousand barrels (MB) or 51-day supply equivalent; 37 days for crude oil and products in country stocks and 14 days in-transit. This was higher by 15.2 percent from FY 2015 level of 18,005 MB. FY December 2016 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.).

As such, updates on the status of oil supply on areas heavily affected by typhoons were provided to the National Disaster Risk Reduction and Management Council (NDRRMC) to ensure continuous supply.

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

The country imported various types of crude oil in 2016 which reached 78,772 MB, a slight increase of 0.9 percent from 2015’s 78,060 MB.

Eighty-seven percent of the total crude mix (68,537 MB) was sourced from the Middle East, of which 36.1 percent (28,438 MB) came from Saudi Arabia, the top supplier of crude oil into the country. Next is Kuwait with a 33.6 percent share of the total crude mix, followed by UAE with a 13.3 percent share. On the other hand, 6.7 percent (5,256 MB) of crude oil was imported from Russia. The remaining 6.3 percent was sourced from the ASEAN (4,980 MB) and from local production (135 MB) (Fig. 1).

Petroleum Product / Ethanol Imports

FY 2016 petroleum product imports totaled 86,108 MB, an increase of 12.9 percent from 2015’s 76,276 MB.

Volume wise, diesel oil import grew by 24.6 percent compared with 2015 import. Kerosene/avturbo, LPG and gasoline imports also rose by 19.9, 19.7 and 3.7 percent, respectively. On the other hand, fuel oil import dropped by 15.3 percent.

The other industry players accounted for majority of the product imports with 73.5 percent of the total imports volume, up by 8.9 percent to 63,319 MB from 2015’s 58,132 MB.  The oil majors (Petron, Chevron and Pilipinas Shell) accounted for the remaining 26.5 percent which increased by 25.6 percent from last year’s 18,144 MB to 22,789 MB.

The local refiners (Petron and Pilipinas Shell) accounted for 16.0 percent of the total product imports, which included blending stocks, as against 84.0 percent share by direct importers.

Product import mix comprised mostly of diesel oil at 41.0 percent, gasoline at 18.2 percent, LPG at 13.5 percent, fuel oil at 8.3, kerosene/avturbo at 8.2 percent and other products at 10.7 percent share in the total product mix.

Total gasoline import reached 43.5 percent of gasoline demand while diesel oil import was 54.5 percent of diesel demand.  LPG import on the other hand, was 68.6 percent of LPG demand.  Total product import was 55.4 percent of the total products demand.

The oil majors’ import share in the total demand was 14.7 percent while the other players’ import share was at 40.7 percent.  As for the refiners, their import share in the total demand was 8.9 percent, while 46.5 percent was attributed to direct importers.

Meanwhile, a total of 1,632 MB ethanol was imported for fuel use during the year which dropped by 14.3 percent from 1,904 MB of 2015.  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, petroleum coke for smelting plants (400 MT) was also imported during the year as well as butane in canisters (208 MT).

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 end year 2016 was up by 2.0 percent from 77,478 MB of 2015 to 79,016 MB. Refinery utilization during the period also increased by 1.7 percent from last year’s 74.4 percent to 75.7 percent this year.  

Consequently, local petroleum refinery production output also grew by 3.1 percent from 75,751 MB to 78,113 MB.  FY 2016 average refining output was at 213.4 MB per day.

Vis-à-vis FY 2015, gasoline output posted an increase of 10.8 percent which may be attributed to the expanded refinery of one local refiner, now capable of producing more white petroleum products. Kerosene/ avturbo output also rose by 10.2 percent. Similarly, LPG and diesel oil also rose by 1.1 and 0.6 percent, respectively.  However, fuel oil output dropped by 18.4 percent.

Diesel oil continued to dominate the production mix with a share of 37.3 percent, followed by gasoline and kerosene/avturbo with 24.2 and 10.8 percent shares, respectively. Meanwhile, LPG and fuel oil got 6.9 and 6.6 shares, respectively (Fig. 2).

DEMAND

Petroleum Product Demand

YTD December 2016 total demand of finished petroleum products grew by 8.5 percent to 155,414 MB from 143,226 MB of YTD December 2015. This can be translated to an average daily requirement of 424.6 MB compared with last year’s level of 392.4 MB).

Compared with YTD December of 2015 figures, diesel oil demand posted an increase of 10.5 percent. LPG, kerosene/avturbo and gasoline demand were also up by 14.0, 12.7, 10.0 percent, respectively. Likewise, naphtha rose by 22.6 percent vis-à-vis last year.  However, fuel oil demand decreased by 11.7 percent.

Product demand mix comprised mostly of diesel oil at 41.8 percent, gasoline at 23.23 percent, LPG at 10.9 percent, kerosene/ avturbo at 10.0 percent, fuel oil at 8.3 percent and naphtha/other products at 5.8 percent share in the total product mix (Fig. 2).

Petroleum Product Exports

Total country’s petroleum products exported as of end year 2016 dropped by1.5 percent from 13,988 MB of 2015 to 13,771 MB.

Vis-à-vis last year, condensate, the top exported products for the period, registered an increase of 5.3 percent. Likewise, export of propylene, pygas and gasoline rose by 46.2, 10.3 and 8.2 percent, respectively.  However, fuel oil and naphtha exports were down by 46.4 and 13.1 percent, respectively. Other petrochem products such as mixed xylene and benzene dropped by 7.0 and 21.5 percent, respectively.

The total export mix comprised of condensate (28.8 percent); naphtha (11.8 percent); gasoline (13.2 percent); fuel oil (11.5 percent); propylene (10.8 percent); pygas (9.7 percent); mixed xylene (5.1 percent); mixed C4 (3.4 percent); toluene (3.1 percent); benzene (1.2 percent) and reformate (1.1 percent).

The oil refiners’ exports accounted for 58.0 percent of the total export mix while the remaining 42.0 percent was accounted to export of other players.  

Crude Oil Exports

A total of 1,804 MB crude oil from Galoc (Palawan Light) was exported during the year which decreased by 26.1 percent from 2015’s 2,441 MB.

MARKET SHARE

Total Petroleum Products

The major oil companies (Petron Corp., Chevron Phils. and Pilipinas Shell Petroleum Corp.) got 57.8 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 42.2 percent of the market (Fig. 3).

Meanwhile, the local refiners (Petron Corp. and Pilipinas Shell) captured 51.0 percent of the total market demand while 49.0 percent was credited to direct importers/end-users.

LPG

The other players’ market share, with the inclusion of South Pacific in early 2016, increased to 63.4 percent.  The remaining 36.6 percent was credited to the oil refiners.

Among the other LPG players, Liquigaz got the biggest market share with a 23.3 percent share, followed by Pryce Gases with a share of 12.7 percent.  Next was Isla Gas with a share of 12.66 percent (Fig. 4).     

OIL IMPORT BILL

FY 2016 estimated total oil import bill amounting to $7,451.9 million was down by 13.5 percent from FY 2015’s $8,612.0 million. This was attributed to lower import cost (for both crude and petroleum products) although petroleum product import volume increased.

Total oil import cost was made up of 55.4 percent finished products and 44.6 percent crude oil.

Total import of crude oil amounted to $3,321.0 million, dropped by 17.9 percent from $4,043.1 million of FY 2015 due to lower CIF price per barrel from 2015’s $51.795/bbl to $42.159/bbl.

Meanwhile, total product import cost was down by 9.6 percent to $4,130.9 million at an average CIF cost of $47.973/bbl vis-à-vis 2015’s $4,568.9 million at an average CIF cost of $59.899/bbl.  Average dollar rate for year 2016 is $47.5 compared to year 2015’s average rate of $44.36.

On the other hand, the country’s petroleum exports earnings for the period fell by 23.2 percent from $878.7 million of year 2015 to $675.0 million this year.  This was due to decreased volume of crude exported for the period and lower FOB price per barrel vis-à-vis 2015 figures.

Overall, the country’s 2016 net oil import bill amounting to $6,776.8 million was down by 12.4 percent from 2015’s $7,733.3 million.