Aquino rejects Petron offer to sell refinery back to gov’t

MANILA, Philippines—Ppresident Aquino on Tuesday turned down Petron’s offer to sell back to the government its Bataan refinery, a proposal that the oil company said would provide the government with “significant influence” on the price of petroleum products in the country.

Aquino said it would not be in the best interest of the country for the government to run Petron’s refinery operations.

“Government isn’t efficient in running something that has purely business applications,” the President told reporters on the sidelines of the celebration of the 110th anniversary of the Philippine Coast Guard in Manila.

“So I think that’s a good offer from them but I don’t think at this point in time it would be in the best interest of the people if government were to re-run Petron, at least as far as the refinery operations are concerned,” he added.

The President said the government might end up losing money and not gaining any advantage over the long term.

“My concept there is, the one running the company, instead of being guided by business principles which will lead to efficiencies, his guidance would be whether the appointing authority would be happy with his doing, contrary to sound business practices,” Aquino said.

“In the end, the one earning profits might end up losing when run by the government. That would be an added burden to the country if we do that,” he added.

Petron Corp., the country’s largest oil refiner and retailer, has offered its Bataan refinery for reacquisition by the government to help address the spiraling prices of petroleum products.

In a letter to Energy Secretary Jose Rene Almendras, Petron chairman and CEO Ramon S. Ang said the company was offering to sell the refinery back to the government if this would help in addressing the issue of increasing pump prices.

“Having control of the largest petroleum refining assets in the country will place the government in a better position to develop and devise comprehensive and long-term programs and solutions,” Ang said in his letter.

“Through this acquisition, the government will enjoy significant influence on the prices of petroleum products and in securing the supply of petroleum products in the country,” he added.

Ang said the offer of Petron’s refinery was a result of the growing public opinion that the government needs to reinvest in Petron as a way to attain effective participation in the petroleum industry.

“The recent trend of rising prices of petroleum products has led to the ongoing discussions in Congress and in media to revisit the Downstream Oil Industry Deregulation Law and a loud clamor for more government participation in the industry,” Ang said.

“In fact, a number of bills have been proposed in both (the Congress and Senate) aimed at implementing measures for government to stabilize prices and secure continuous supply of petroleum products in the country,” Ang added.