THE government does not have the resources to accept Petron Corp.’s offer to reacquire its refinery assets in Limay, Bataan, according to Energy Secretary Jose Rene Almendras, who described the plan as an “uneconomical alternative.”

At the same time, he also acknowledged the possibility that Pilipinas Shell Petroleum Corp., another refiner, would eventually decide to downscale its business operations in the Philippines because of the current problems on oil prices and the mounting protests against them.

“And if Shell shuts down its refinery and everybody else pulls out, we will be forced to take Petron’s offer,” Almendras said.

The energy chief said Petron’s offer will be discussed during the meeting of the government’s economic advisers this week.

“So far, in the conversations I’ve had with a few Cabinet members, there’s really no fund [for the Petron offer]. The problem is if we go this way, we have to give up something and we have been trying to stimulate investment to insulate the economy from going down.”

Almendras said there were other programs on the government’s list of priorities for resources that need the money more.

“If we decide to buy back the facilities then we would have to cancel some schools, hospitals and some infrastructure projects elsewhere to which President Aquino has already said that he wants to prioritize on social services programs,” he said.

The President specifically said in his budget memo that he would rather have his government spend on programs or projects that will directly benefit people, Almendras said.

Almendras also said that contrary to criticisms that Petron’s move seemed to be a threat to the government, the offer of Petron Chairman and Chief Executive Ramon Ang showed the company’s strong belief in the Aquino administration.

In his letter, Ang told Almendras the sale offer indicated the company’s full support for the
government.

“We appreciate the move of Petron to readily help us by offering the reacquisition of the government’s stake in Petron and their support to abide with whatever decision the Aquino administration will make,” Almendras said.

On Shell, Almendras said it was “probable” that the firm would downscale its operations here.  “But I have not received any official indication. I really don’t know. All I know is that these guys are not happy like they used to. Maybe it’s because the DOE is doing a better job in monitoring and in ensuring oil prices are transparent,” he said.

“But we cannot push them too far, we cannot push it too much. If you push it too much, they could just leave the country. And if Shell shuts down its refinery and everybody else pulls out, we will be forced to take Petron’s offer,” he said.

Shell has already sold its liquefied petroleum gas (LPG) business to Isla Petroleum and Gas Corp., a Japanese-Philippine consortium.

The energy chief said Ang also expressed Petron’s dissatisfaction with the current pressures in the local downstream oil industry. “I think Petron is affected by the criticism that they are allegedly taking advantage of the Filipino people and they want to show they are willing to let go,” Almendras said.

“The problem is there are some people who are using the issue of oil prices to further their motives. Why is the oil industry more politicized here in the country compared to other places? I think the key here is to really accept and understand that the situation of petroleum is really different now,” he said.

He said Petron and Shell have already started exporting fuel products and diesel products, respectively. “And why do they export their products? Perhaps they get a better price for their products in other countries compared to here, and we cannot stop them from exporting. And why should we stop them in this time of globalization?” he said.

Almendras gave assurances, however, that the energy department will continue to strengthen its monitoring. “Right now, our focus is price monitoring and it’s not just on the oil companies but also the dealers. We have proven that the government has been effective with the oil-price monitoring in oil companies. It’s the retail side that we want to strengthen,” he said.