A Case Study on Different Major Players of Fuel Oil in the Philippines

By: Alvarado, Romm Bryan B.

BSME-5TH YR

Many people, both from the private and public sector, claim that retail gasoline price
movements do not respond symmetrically to crude oil price changes. In particular, they believe
that retail gasoline prices do not reflect decreases in crude oil prices as rapidly and fully as crude
oil price increases.
In July 2008, the retail price of the gas significantly increased to Php 60.00 per liter.
Since that time, the retail prices of gasoline has gone down to Php 31.00 per liter in December
2008 because of the huge decrease in world crude oil price. In July 2008 the West Texas
Intermediate (WTI) crude oil was traded at a spot price of $145.31 per barrel; in December
2008, WTI crude oil decreased to a spot price of $36.73 per barrel. If we compare the
magnitude of decrease in retail prices of gasoline with that of world crude oil prices, we can
easily find that the former declined by only 50% while the latter fell by 75%. Interestingly, from
April to July2008, Dubai crude oil prices increased by 42% and retail gas prices in Philippines
increased by only 27%.
The three major oil players in the Philippines are Petron Corporation, Pilipinas Shell
Petroleum Corporation and Chevron Philippines. It is notable that the so-called Big 3 oil players
used to corner nearly 100 percent of the Philippine petroleum market before the passage of the
Downstream Oil Industry Deregulation Act of 1998. The Big 3 saw their combined market share
decline to 85 percent in 2006.

1. Petron Corporation
Petron Corporation is the largest oil refining and marketing company in the Philippines.
Supplying nearly 40% of the countrys oil requirements, our world class products and quality
services fuel the lives of millions of Filipinos. We are dedicated and passionate about our vision
to be the leading provider of total customer solutions in the energy sector and its derivative
businesses. Petron operates a refinery in Limay, Bataan, with a rated capacity of 180,000 barrels
a day. Petrons International Standards Organization (ISO) 14001 - certified refinery processes
crude oil into a full range of petroleum products including liquefied petroleum gas (LPG),
gasoline, diesel, jet fuel, kerosene, and industrial fuel oil. We also produce petrochemical
feedstocks namely benzene, toluene, mixed xylene and propylene.
From the refinery, Petron moves its products mainly by sea to 32 depots and terminals
situated all over the country. Through this nationwide network, Petron supplies fuel oil, diesel,
and LPG to various industrial customers. Petron also supplies jet fuel at key airports to
international and domestic carriers.

Through over 1,500 service stations, Petron retails gasoline, diesel, and kerosene to motorists
and public transport operators. Petron also sells its LPG brand Gasul and Fiesta Gas to
households and other consumers through an extensive dealership network.
Petron operates a lube oil blending plant at Pandacan Oil Terminal, where it manufactures
lubes and greases. These are also sold through Petrons service stations and sales centers. Petron
also operates a fuel additives blending facility at the Subic Bay Freeport. This plant serves the
needs of Innospec, a leading global fuel additive company, in the Asia-Pacific region. At the
same time, the company sources its requirements from this plant.
In April 2008, Petron inaugurated its 19,000 barrel per day Petron Fluidized Catalytic
Cracking (PetroFCC) unit which enables Petron to convert fuel oil into more high value products
namely gasoline, diesel and LPG. The PetroFCC also produces the petrochemical feedstock
propylene. The propylene is further purified through the Propylene Recovery Unit so that it can
be used as raw material for everyday products such as home appliances, automobile parts, etc.
Subsequently, Petron started operating its Benzene, Toluene, Xylene (BTX) Extraction Unit
in mid-2009. The BTX unit expanded Petrons capability to produce more petrochemical
feedstocks on top of its Propylene and Mixed Xylene production.
Petron Fuel Price:
(Increased)
1.40/L Blaze100, XCS95, Xtra91;
1.40/L Turbo Diesel, Diesel Max;
1.45/L Kerosene;
2. Pilipinas Shell Petroleum Corporation
The Shell companies in the Philippines (SciP) represent various companies operating in oil
and gas exploration, extraction, refining and delivery to consumers. Commencing its operations
in 1914, SciP has grown to be one of the Philippines largest investors, directly employing over
4,000 people nationwide.
SciP is part of Shell, a global group of energy and petrochemicals companies employing
approximately 93, 000 people and operating in more than 90 countries and territories. Shell helps
meet the worlds growing demand for energy, aiming to do so in economically, environmentally
and socially responsible ways.
Pilipinas Shell Petroleum Corporation (PSPC) is involved in the manufacture, marketing,
sales, supply and distribution of oil productsserving customers in almost every field of
transport, commerce and industry with its wide range of high quality fuels, lubricants, liquefied

petroleum gas, aviation fuel, bitumen and other specialty products. Pilipinas Shell commenced
operations of its first crude distiller in Tabangao, Batangas in 1962 (now an oil refinery since
1994). Shell also opened a refrigerated LPG terminal in 1983, the first of its kind in Asia
operated by Shell Gas Eastern, Inc. with trading handled in the region by Shell Gas Trading Asia
Pacific.
In the business of oil and gas exploration and production, Shell Philippines Exploration B.V.
(SPEX) operates the Malampaya Deep Water Gas-to-Power Project together with its joint
venture partners. Malampaya represents the largest and most significant industrial investment in
the history of the Philippines. It heralded the birth of the countrys natural gas industry, enabling
the supply of clean, environment-friendly fuel and providing 2,700 megawatts of power to Luzon
for a period of 20 years. This represents roughly 40-45% of Luzons power generation
requirements, providing the country a considerably long-term revenue stream to the government,
in addition to considerable foreign exchange savings.
In 2004, Shell set up a pioneering new activity with the establishment of the Shell Shared
Services (Asia) B.V. (now called Shell Business Operations Manila) which provides
accounting, human resources and other business-related processing services to Shell companies
in various parts of the world. Now employing over 3,000 staff, Shell Business Operations-Manila
has been recognized for its operational and compliance excellence.
To further strengthen and support SciPs corporate social responsibility thrusts, Pilipinas
Shell Foundation, Inc. (PSFI) was established in 1982 to serve as the social investment arm of
Shell in the Philippines. PSFI implements various training and community development
programs in communities nationwide, and on its 25th year in 2007, the foundation surpassed its 1
million beneficiaries mark. To date, PSFI has benefited over 8.5 million people all over the
country through its community development programs.
This year, Shell companies in the Philippines is celebrating its 100 years of business presence
in the Philippines and is committed to delivering smarter products and cleaner energy for better
motoring experience for the present and future generations of Filipinos. As a global leader in
power, energy, and gas technology, Shell remains to be a strong promoter of sustainable
development in the country by energizing communities all over the country for a more
sustainable energy future.
Shell Fuel Price
(Increased)
1.40/L VP N+ Racing97, VPN+95, FuelSave91
1.40/L VPN+ Diesel, FS Diesel
1.45/L Kerosene

3. Chevron Philippines
Chevron is one of the largest investors in the Philippines, with more than $2 billion in capital
investments. They market Caltex fuels, lubricants and other petroleum products. Their network
of service stations, terminals and sales offices forms the backbone of their presence in the
Philippines.
Chevrons geothermal operations in the Philippines help make us one of the worlds leading
producers of geothermal energy. Through a joint venture, they operate steam fields that use heat
from the earth to provide power to plants that serve key population centers in the country. Their
innovations have helped make the Philippines the second-largest producer of geothermal energy
in the world, after the United States. Chevron holds an interest in the Malampaya gas-to-power
project, the first natural gas development and largest industrial project in the Philippines. From
the Philippines, we provide operational support for Chevron offices on five continents. The
workforce supplies transactional, processing and consulting services in areas ranging from
finance to information technology. Chevron operates through five subsidiaries in the Philippines.
Their upstream companies are Chevron Malampaya LLC, Chevron Geothermal Services
Company and Chevron Kalinga Ltd. Their downstream company is Chevron Philippines Inc.
They also operate a business processes support organization through Chevron Holdings Inc.
Chevron has nearly 700 Caltex service stations in the Philippines. We sell a range of
petroleum products, including Caltex with Techron gasoline, Caltex Diesel with Techron D,
kerosene and jet fuel. Chevron has 20 supply facilities in the Philippines, including major
terminals and depots. Their import terminal in San Pascual, Batangas, forms the hub of their
transportation and supply operations in the Philippines. Chevron also provides jet fuel for airlines
at Ninoy Aquino International Airport. Chevron also markets Delo and Havoline lubricants
and coolants, along with other lubricating oils and greases, through distributors to consumer,
commercial and industrial customers.
Caltex Fuel Price
(Increased)
1.40/L Platinum95, Silver91
1.40/L Diesel
1.45/L Kerosene

References:
http://journals.upd.edu.ph/index.php/pmr/article/viewFile/2789/2603
https://business.inquirer.net/209369/major-oil-players-market-share-shrinking
http://www.petron.com/
http://pana.com.ph/directories/pilipinas-shell-petroleum-corp/
https://www.chevron.com/worldwide/philippines
https://twitter.com/Petrol_Price