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Apparently stung by criticisms of being too slow in lowering pump
prices amid declining world oil prices, Petron Corp. dared lawmakers
to sift through its books to check if the company is making undue
profits.
“If lawmakers actually look into our financial
position, they would find that we are in a very difficult
situation,” Virginia Ruivivar, Petron public affairs manager, said
Friday.
On Friday, world oil prices fell to a four-year
low.
And in the first nine months of 2008, Petron,
the country’s largest oil refiner, reported a 32-percent drop in
net income compared to 2007.
The company’s margins contracted as domestic
prices of refined products fell much faster than its crude costs, it
added. With the continuing steep drop in crude prices, the company
expects to post a net loss in the fourth quarter, company executives
said.
Including product exports, Petron’s return on
sales as of the third quarter is equivalent to only about 1.3
percent, the company said in a statement. This means that the
company only earns P0.01 for every P1 sale.
“In the first half of the year when
international prices were rising, we fully cooperated with the
Department of Energy when it conducted an audit to check if local
prices were reasonable,” Ruivivar said.
In May 2008, the Energy department directed
auditing firm SGV and the University of Asia and the Pacific to
audit the books of oil firms.
If oil companies had been overpricing, it should
have shown up in extraordinarily high profit rates, observers said.
But the study revealed that Petron’s return on
equity from 2005 to 2007—when oil prices were rising—was much
lower than interest rates on Treasury bills and Treasury bonds.
The study also found that local pump prices did
not go up as fast as the price of crude and finished products abroad
during the period.
“We have always supported initiatives to
ensure transparency in oil pricing,” Ruivivar said. “As a
publicly listed company, our financial statements can be scrutinized
by anyone.”
World oil prices
Oil prices rose in Asia from near four-year lows
on Friday but analysts said prices were likely to fall even further
as economic data signaled a global economic downturn may be deep and
prolonged, analysts said.
In afternoon trade New York’s main futures
contract, light sweet crude for January delivery, rose 39 cents to
$44.06 a barrel—off a low of $43.39—after dropping $3.12 to
$43.67 on the New York Mercantile Exchange on Thursday. That was the
lowest price since January 2005.
Brent North Sea crude for January gained 33
cents to $42.61 a barrel, slightly off its morning low of $42.13.
The contract fell $3.16 to $42.28, also the lowest level since
January 2005, on Thursday in London.
It is “way, way premature” to think that the
market has hit bottom, said David Moore, a commodities strategist
with the Commonwealth Bank of Australia in Sydney.
“The focus is well and truly on the weakness
in consumption, and that doesn’t seem likely to go away in the
next 24 hours.”
Oil prices have lost more than two-thirds of
their value since striking record highs above $147 in July, pulled
down by a widening global economic slowdown that weighs on demand,
analysts said.
More bad news
Moore said a US report on unemployment, due out
later Friday (today in Manila), could re-emphasize the focus on bad
economic news and resultant lower demand for energy.
The key November non-farm payrolls and
unemployment report is expected to show the loss of 325,000 jobs in
the United States, the world’s largest economy and biggest energy
consumer.
The US, European Union, Japan and other
economies are already in recession, and investors are worried about
an increasingly marked decline in demand among the industrialized
countries, and a slowdown in emerging countries such as China.
“Fears of a prolonged global recession
continued to weigh on sentiment,” said Sucden analyst Nimit Khamar
in London.
The jittery market shrugged off sharp interest
rate cuts Thursday by four central banks in Europe, including the
European Central Bank and Bank of England, dealers said. The cuts
were aimed at reversing the economic downturn.
Wall Street bank Merrill Lynch forecast crude
oil could fall to $30 a barrel in New York if the global recession
extends to China and OPEC fails to cut back production to meet
slowing demand.
The Organization of Petroleum Exporting
Countries (OPEC), which pumps about 40 percent of the world’s
crude, is to meet on December 17.
Moore said a cut in production is likely at the
meeting, and could help spark some recovery in oil prices.
-- Euan Paulo C. Añonuevo and AFP
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