Inventory

           Actual crudes and petroleum products closing inventory for the month of December 2014 was reported at 17,180 thousand barrels (MB) or 52-day supply equivalent; 37 days for crude oil and products in country stocks and 15 days in-transit. This is higher by 48.2 percent from December 2013 level of 11,589 MB. YTD December 2014 average inventory was recorded at 15,108 MB or equivalent to 46-day supply.

          The Minimum Inventory Requirement (MIR) is still being enforced 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

Full year 2014 total crude oil imports reached 64,938 MB, an increase of 15.3 percent vis-à-vis year 2013’s 56,343 MB.

           About seventy-five percent of these crude oil imports originated from the Middle East, of which 37,103 MB (57.1 percent) came from Saudi Arabia, the country’s major supplier of crude oil. On the other hand, 11,346 MB of crude oil was imported from Russia or 17.5 percent of the total crude oil mix. The remaining 6.9 percent (4,506 MB) were sourced from Malaysia, Brunei, Vietnam and from local production (Fig. 1).

Petroleum Product Imports

Year 2014 petroleum product imports totaled 68,130 MB, an increase of 9.7 percent from year 2013’s 62,112 MB.

Vis-à-vis 2013 figures, diesel oil import was up by 11.5 percent while LPG and gasoline import grew by 2.8 and 2.1 percent, respectively. Fuel oil import also grew by more than 80 percent (81.6), which may be due to increase in demand of the same. However, kerosene/avturbo imports dropped by 12.0 percent.

About fifty-four percent of the total product imports were accounted to the other industry players, up by 6.2 percent to 36,839 MB from 34,674 MB in 2013. The oil majors (Petron, Chevron and Shell) accounted for the remaining 45.9 percent, which increased by 14.0 percent from 2013’s 27,438 MB to 31,291 MB.

The local refiners (Petron and Pilipinas Shell) accounted for 31.3 percent of the total product imports, which included blending stocks, as against 68.7 percent share by direct importers.

Product import mix comprised mostly of diesel oil at 43.0 percent, gasoline at 21.8 percent, LPG at 13.5 percent, kerosene/ avturbo at 10.2 percent, fuel oil at 7.2 percent and other products at 4.4 percent share in the total product mix.

Gasoline import reached 51.9 percent of total gasoline demand while diesel oil import was 55.6 percent of total diesel demand. LPG import on the other hand, was 70.4 percent of total LPG demand. Total product import was 54.7 percent of the total products demand.

The oil majors’ import share in the total products demand was 25.1 percent while the other players’ import share was at 29.6 percent. As for the refiners, their import share in the total products demand was 17.1 percent, while 37.6 percent was attributed to direct importers.

Meanwhile, a total of 2,132 MB ethanol was imported for fuel use in 2014, an increase of 6.4 percent vis-à-vis 2013’s 2,005 MB. Republic Act No. 9367 of 2007 mandated that all gasoline 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 end year 2014 grew by 6.3 percent from 57,711 MB of end year 2013 to 61,372 MB. The reported refinery capacity utilization also increased to 59.0 percent from 55.6 percent of last year.

Correspondingly, local petroleum refinery production output was also up by 5.8 percent from 56,047 MB to 59,301 MB. Year 2014 average refining output was at 162.5 MB per day.

Refinery output of diesel oil rose by 3.7 percent vis-à-vis last year. Fuel oil and gasoline were also up by 7.0 and 3.8 percent, respectively. Kerosene/avturbo also grew by 13.3 percent. On the other hand, refinery output of LPG decreased by 6.2 percent.

Diesel oil continued to dominate the production mix with a share of 37.3 percent, followed by fuel oil and gasoline with 19.2 and 18.7 percent share, respectively. Next were kerosene/avturbo and LPG with shares of 10.8 and 5.8 percent, respectively (Fig. 2).

DEMAND

Petroleum Product Demand

Year-to-date December 2014 total demand of finished petroleum products grew by 6.0 percent to 124,503 MB from 117,489 MB of year-to-date December 2013. This can be translated to an average daily requirement of 341.1 MB compared with last year’s level of 321.9 MB.

Compared with year-to-date December of 2013 figures, all products showed increases in demand volume. Fuel oil recorded the highest growth of 7.1 percent. Diesel oil and gasoline demand also rose by 6.3 and 4.2 percent, respectively.

Product demand mix comprised mostly of diesel oil at 42.3 percent, gasoline at 23.0 percent, fuel oil and kerosene/avturbo at 10.7 percent, LPG at 10.5 percent, and other products at 2.8 percent share in the total product mix (Fig. 2).

Petroleum Product Exports

FY 2014 total country’s petroleum products exports were up by 10.2 percent from 8,616 MB of 2013 to 9,496 MB.

Condensate exports, the top exported product for the period, increased by 15.3 percent vis-à-vis year 2013. Likewise, fuel exports increased by 1.9 percent for the same period. However, naphtha export decreased by 25.7 percent. Meanwhile, all petro-chemical products such as mixed xylene, toluene, benzene and propylene increased vis-à-vis last year.

The total export mix comprised of condensate (46.4 percent); naphtha (17.7 percent); fuel oil (17.0 percent); mixed xylene (7.3 percent); toluene (3.8 percent); pygas (2.9 percent); propylene (2.0 percent); benzene (1.8 percent); reformate (1.2 percent) and LPG (0.02 percent).

The oil refiners’ exports accounted for 50.7 percent of the total export mix while the remaining 49.3 percent was accounted to the export of Shell Philippines Exploration B. V. (SPEX), Liquigaz and Petronas.

Crude Oil Exports

A total of 2,833 MB crude oil from Galoc (Palawan Light) were exported for the year which increased by more than 100 percent from 2013’s 1,388 MB.

MARKET SHARE

Total Petroleum Products

The major oil companies (Petron Corp., Chevron Phils. and Pilipinas Shell Petroleum Corp.) got 68.9 percent market share of the total demand while the other industry players, which include PTT Philippine Corp. (PTTPC), Total Phils., Seaoil Corp., TWA, Filpride, Phoenix, Liquigaz, Petronas, Prycegas, Micro Dragon, Unioil, Isla LPG Corp., Jetti, Eastern Corp., Perdido and Filoil Gas Co., as well as the end users who directly import part of their requirements captured 31.1 percent of the market (Fig. 3).

Meanwhile, the local refiners (Petron Corp. and Pilipinas Shell) captured 60.9 percent of the total market demand while 39.1 percent was credited to direct importers/distributors.

LPG

Since Pilipinas Shell sold the share capital of Shell Gas (LPG) Philippines Inc. to Isla LPG Corp. in 2012, the LPG market share of the oil refiners was reduced to 35.5 percent. The other players on the other hand, with the inclusion of Isla LPG, increased to 64.5 percent.

Among the other LPG players, Liquigaz got the biggest market share with a 30.4 percent share, followed by Isla LPG with a share of 14.5 percent. Next was Petronas with a share of 8.7 percent (Fig. 4).

OIL IMPORT BILL

Year 2014 total oil import bill amounting to $13,522.9 million was only slightly up by 0.4 percent from year 2013’s $13,471.2 million, which could be attributed to lower import cost (for both crude and petroleum products) although import volume increased.

Total oil import costs were made up of 46.0 percent crude oil and 54.0 percent finished products.

Total import of crude oil which amounted to $6,215.5 million dropped by 0.5 percent from 6,247.8 million of 2013, due to lower

CIF price per barrel from 2013’s $110.887/bbl to $95.715/bbl.

On the other hand, total product cost increased by 1.2 percent to $7,307.4 million from 2013’s $7,223.4 million. However, CIF average price is lower at $107.257/bbl compared with 2013’s $116.297bbl.

Meanwhile, the country’s petroleum exports earnings for the period rose by 14.4 percent from 2013’s $1,076.0 million to $1,230.9 million in 2014.

Overall, the country’s 2014 net oil import bill amounting to $12,292.0 million was down by 0.8 percent from 2013’s $12,394.9 million.