Bizmen see cheaper goods, lowered prices of gasoline

Business leaders in Cebu welcomed the idea of building an oil refinery in the province, citing its benefits to the local economy.

For Virgilio Espeleta, Cebu Chamber of Commerce and Industry (CCCI) vice president for business development, such facility will create employment and downstream opportunities for locals.

“Likewise, it will reduce the cost of finished goods for the benefit of consumers,” he said in a text message to Cebu Daily News on Tuesday.

Petron Corp., the country’s largest oil firm, was considering Bicol and Cebu as the site for a new refinery due to advantageous logistical considerations for both locations, and a large local market in the case of the latter province.

According to its chief Ramon Ang, in an Inquirer report, they would seek a foreign partner for this expansion aimed at meeting the growing domestic demand for finished petroleum products.

While Espeleta was open to the idea of building an oil plant here, stakeholders should remain vigilant on possible environmental impacts.

Philippine Exporters Confederation, Inc. (Philexport) Cebu executive director Federico Escalona said a new refinery here would be fine for as long as the outcome would be the lowering of prices of gasoline.

“They should locate at a non-populated area. Cost of freight adds to the price of gas,” Escalona said.

Gordon Alan Joseph, president of the Cebu Business Club (CBC), said locating in the regions would theoretically reduce the oil firm’s logistics costs.

“In theory, this should reduce their logistics costs which is probably why they are thinking of constructing refineries in the region,” said Joseph.

He said he hopes the firm will pass at least some of these savings on to the consumers.

Ang — the president of Petron’s parent firm, San Miguel Corporation — bared plans for a new integrated crude oil refinery that could process up to 250,000 barrels of petroleum per day in an interview with Manila reporters last week.

This expansion would increase Petron’s total refinery output by 138 percent since its current refining complex in Limay, Bataan has a total rated capacity of 180,000 barrels per day to process crude oil into gasoline, jet fuel, industrial fuel oil, diesel, kerosene and liquefied petroleum gas and lubricants, among others.

Ang said he hopes to invite big foreign companies such as Saudi Aramco or Kuwait Petroleum Corporation (KPC) to come and put up a new oil refinery.

Ang estimated that a 250,000-barrel-per-day oil refinery would cost at least $10 billion to build.