Petron Corp., the Philippines’ largest oil company and sole remaining refiner, posted a sharp earnings decline in the first quarter of 2026 as refinery disruptions and global crude volatility weighed on margins despite stronger revenues.
Net income fell 56 percent year on year to P1.8 billion from P4 billion, reflecting weaker refining output in both the Philippines and Malaysia alongside higher feedstock costs driven by geopolitical tensions in the Middle East.
Revenue rose 27 percent to P246 billion, supported by higher selling prices and steady demand, but this was insufficient to offset rising costs. Operating income declined 36 percent to P6.1 billion as refining margins came under pressure.
A key operational constraint came from Malaysia, where the Port Dickson Refinery has remained shut since November 2025 after its product jetty was damaged during Tropical Storm Senyar. In the Philippines, the Petron Bataan Refinery in Limay completed scheduled maintenance during the quarter, further limiting output.
Global crude markets added further strain. The US-Israel conflict involving Iran disrupted crude flows from the Middle East, a major supply source for the region. Dubai crude surged to USD129 per barrel in March 2026, nearly double February levels, before averaging USD86 per barrel for the quarter, still 12 percent higher year on year.
Sales volume, excluding trading operations in Singapore, declined 7 percent to 25.7 million barrels due to lower refinery production. Petron partially offset this by reducing exports and prioritizing domestic retail and commercial supply.
Petron president and chief executive officer Ramon S. Ang said the company is focused on maintaining fuel security while managing unprecedented market volatility. “We know these are uncertain times, and we are committed to doing everything we can to sustain our operation and keep the economy moving,” Ang said. “As the Philippines’ sole remaining oil refiner, we recognize our responsibility to help address the nation’s fuel challenges.”
He added that Petron has expanded crude sourcing beyond traditional Middle East suppliers, while its Bataan refinery is capable of processing a broader slate of crude grades.
The results highlight how refiners are absorbing the immediate impact of global energy shocks, with supply disruptions and price spikes simultaneously compressing margins and reshaping operational strategy.
