SUPPLY

• Inventory

As of end-month December 2018, actual crudes and petroleum products inventory closed at 23,502 thousand barrels (MB) or 50-day supply equivalent; 44 days for crude oil and products in country stocks and 6 days in-transit.  This was higher by 15.4 percent from December 2017’s 20,362 MB.

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.

The DOE issued a directive sometime in September 2018, which required the oil companies to provide updates on the status of their oil supply and facilities in the Northern and Central parts of Luzon which were hit by Typhoons Ompong and Rosita in order to monitor and ensure continuous oil supply in the affected areas.

With the scheduled effectivity of the 2^nd tranche of RA 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN Law) in January 2019, the Department also issued a directive to the oil companies that implementation of the new excise tax shall not be applied unless the old stocks of finished petroleum products (December 31, 2018 inventory) are fully exhausted. Hence, the directive requires the oil companies to submit starting January 1, 2019 daily inventory of the remaining balance of the December 31, 2018 stocks on a per product and per depot basis until the same are exhausted to ensure proper implementation of the new  tax scheme.

• Crude Oil Supply

Majority of the crude oil imports were sourced from the Middle East (86.9%), of which 33.7 percent came from Saudi Arabia (28,880 MB), the top supplier of crude oil into the country.  Next was Kuwait with a 26.3 percent share of the total crude mix, followed by UAE and Russia with 20.9 and 7.4 percent share, respectively. On the other hand, 4.5 percent  of the crude import mix originated from the ASEAN Region (3,880 MB) and 0.1 percent from local production (94 MB).  A total of 349 MB crude oil was also imported from Nigeria. The remaining 1.9 percent was from Oman (1,091 MB), Taiwan (559 MB) and South Korea (31 MB) (Fig. 1). 

• Petroleum Product Imports

Total country’s FY 2018 petroleum product imports totaled 97,573 MB, slightly rose by 0.2 percent from FY 2017’s 97,415 MB.  

The top imported product for the period was diesel oil which dropped by 3.3 percent from last year’s level.  Fuel oil imports also decreased by 24.2 percent. On the other hand, gasoline import, was up by 10.7 percent vis-à-vis last year’s level. Likewise, LPG and kerosene/avturbo imports increased by 9.4 and 3.8 percent, respectively.

The other industry players accounted for majority of the product imports with 77.1 percent of the total imports volume, up by 1.6 percent to 75,195 MB from last year’s 74,023 MB.  The oil majors (Petron, Chevron and Pilipinas Shell) accounted for the remaining 22.9 percent which declined by 4.3 percent from last year’s 23,391 MB to 22,378 MB. 

The local refiners (Petron and Pilipinas Shell) accounted for 11.0 percent of the total product imports, which included blending stocks, as against 89.0 percent share by direct importers.        

Product import mix comprised mostly of diesel oil at 39.7 percent, gasoline at 19.5 percent, LPG at 15.6 percent, kerosene/avturbo at 9.8 percent, fuel oil at 5.4 percent and other products at 10.0 percent share in the total product mix.

Total gasoline import reached 46.9 percent of gasoline demand while diesel oil import was 55.0 percent of diesel demand.  LPG import on the other hand, was 74.3 percent of LPG demand.  Total product import was 57.8 percent of the total products demand. 

The oil majors’ import share in the total demand was 13.3 percent while the other players’ import share was at 44.5 percent.  As for the refiners, their import share in the total demand was 6.4 percent, while 51.4 percent was attributed to direct importers.

• 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 YTD December 2018, the local refiners  processed 86,555 MB of various type of crude oil, an increase of 12.1 percent vis-à-vis last year’s level of 77,192 MB. Refinery utilization during the period was at 82.0 percent vis-à-vis last year’s 74.2 percent.

Consequently, local petroleum refinery production output was also up by 13.1 percent from 75,981 MB of FY 2017 to 85,958 MB.  FY 2018 average refining output was at 235.5 MB per day.

Diesel oil and gasoline output increased by 19.5 and 13.1 percent, respectively. Similarly, LPG and kerosene/avturbo output grew by 15.1 and 12.5 percent, respectively On the other hand, fuel oil output dropped by 24.5 percent. 

Diesel oil continued to dominate the production mix with a share of 38.6 percent, followed by gasoline and kerosene/avturbo with 24.4 and 9.8 percent shares, respectively.  Meanwhile, LPG and fuel oil got 6.9 and 5.7 shares, respectively (Fig. 2).

DEMAND

• Petroleum Product Demand

FY 2018 demand of petroleum products totaled 168,805 MB, an increase of 0.6 percent from 167,736 of last year. This can be translated to an average daily equirement of 462.5 MB compared with last year’s level of 459.5 MB. 

Compared with FY 2017 figures, diesel oil demand was up by 3.2 percent. Similarly, demand of LPG, kerosene/avturbo and gasoline increased by 10.4, 4.8 and 3.0 percent, respectively. However, fuel oil demand dropped by 20.3 percent.

Product demand mix comprised mostly of diesel oil at 41.8 percent, gasoline at 24.0 percent, LPG at 12.1 percent, kerosene/ avturbo at 10.7 percent, fuel oil at 5.5 percent  and other products at 5.9 percent share in the total product mix (Fig. 2).

• Petroleum Product Exports

Total country’s petroleum products exports as of FY 2018 grew by 16.7 percent  from 14,600 MB of FY 2017 to 17,043 MB.

Vis-à-vis last year, condensate, the top exported product for the period increased by 9.8 percent. Gasoline exports rose by more than two hundred percent. Naphtha exports also grew by 25.0 percent.  On the other hand, fuel oil, pygas and mixed xylene exports dropped by 29.9, 10.0 and 3.4 percent, respectively.  Meanwhile, 892 MB diesel oil and 312 MB asphalts were exported this year versus nil export of last year.

The total export mix comprised of condensate (23.2 percent); fuel oil (11.8 percent); gasoline (11.2 percent); propylene (10.8 percent); naphtha (9.9 percent); pygas (9.7 percent); mixed C4 (6.8 percent); diesel (5.2 percent); mixed xylene (4.2 percent); toluene (2.8 percent; asphalts (1.8 percent); reformate (1.7 percent); benzene (1.0 percent) and LPG (0.04 percent).

The oil refiners’ exports accounted for 60.4 percent of the total export mix while the remaining 39.6 percent was accounted to export of other players. 

• Crude Oil Exports

A total of 1,066 MB crude oil from Galoc (Palawan Light) sourced from US, was exported in 2018 yet crude oil export dropped by 24.3 percent from FY 2017’s 1,409 MB.

MARKET SHARE 

• Total Petroleum Products

The major oil companies (Petron Corp., Chevron Phils. and Pilipinas Shell Petroleum Corp.) got 52.8 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, 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 and Filoil Logistics Corp.,  as well as the end users who imported directly most of their requirement captured 47.2 percent of the market (Fig. 3).

Meanwhile, the local refiners (Petron Corp. and Pilipinas Shell) captured 44.9 percent of the total market demand while 55.1 percent was credited to direct importers/end-users.

• LPG

The other players’ market share was 70.9 percent while the remaining 29.1 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 13.4 percent.  Next were Isla Gas and Prycegases with shares of 12.04 and 11.0 percent, respectively (Fig. 4).  

OIL IMPORT BILL

FY 2018 estimated total oil import bill amounting to $13,477.9 million was up by 31.8 percent from FY 2017’s $10,228.7 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 54.5 percent finished products and 45.5 percent crude oil.

Total import of crude oil amounted to $6,138.8 million, up by 41.8 percent from $4,330.4 million of FY 2017 due to higher CIF price of crude oil per barrel from FY 2017’s $55.774/bbl to $71.587/bbl. 

Meanwhile, total product import cost was up by 24.4 percent from  $5,898.3 million at an average CIF cost of $60.548/bbl vis-à-vis FY 2018’s $7,339.1 million at an average CIF cost of $75.216/bbl. The increase was attributed to higher import cost this year.

On the other hand, the country’s petroleum exports earnings for the period was up by by 40.0 percent from $972.5 million in YTD December 2017 to $1,361.3 million this year. 

Overall, the country’s net oil import bill amounting to $12,116.6 million grew by 30.9 percent from last year’s $9,256.1 million.

Average dollar rate for YTD December 2018 is $52.670 compared to YTD December 2017’s average rate of $50.834.