PETRON Corp is reducing contracts with local tanker operators, and this is making members of the Philippine Petroleum Sea Transport Association (Philpesta) antsy.
Petron’s decision is understood to mean that it will now progressively use tankers of SMC Shipping and Lighterage Corp, the shipping arm of beverage giant San Miguel Corp (SMC), which owns a majority stake in Petron.
In August of last year, SMC Shipping acquired a second-hand oil tanker worth P552.3 million to service Petron.
Philpesta said about 40% of tankers in the country will be displaced if Petron, the tanker industry’s biggest client, continues with its move.
“Petron already advised their carriers (it) will not renew contracts… once the agreement expires,” Philpesta executive director Ernesto Pagayo told PortCalls.
“The industry is hoping the pullout will not be so sudden (so we can) look for alternative markets.”
Pagayo added, “Tanker operators are really worried about this scenario considering it is happening at a very volatile environment due to the global financial crisis.”
Philippine Transport and Shipping Corp and Herma Shipping have the longest-running contracts with Petron. Their acquisition of tankers specifically for use by the oil company has been temporarily shelved because of recent developments.
The two companies are now trying to convince SMC Shipping to just charter their existing tankers rather than buy new ones.
