With the COVID-19 pandemic essentially wiping out demand for oil and other petroleum-based products, Shell Philippines announced that the Tabangao oil refinery will temporarily shut down for one month.

In a press statement the company released, Shell Philippines said that the 110,000 barrel-per-day facility will halt operations beginning sometime in May of this year. “In response to the drastic decline in local product demand and the significant deterioration of regional refining margins brought about the COVID-19 pandemic, the company will temporarily shut down its refinery operations for approximately one month starting mid-May 2020,” said the company in a statement.

Due to low demand, Shell PH temporarily shuts Batangas refinery image

But with Shell temporarily halting operations at the Tabangao refinery in Batangas City, where will the company source oil? The company said that they will resort to the full importation of petroleum products to maintain a steady supply. With it, the company said that this will safeguard its 'continuous and cost-effective supply of high-quality fuels in the country'. Shell Philippines also said that they will also use this opportunity to conduct maintenance activities in the Tabangao refinery.

“The company will also use the refinery shutdown as an opportunity to conduct proactive maintenance activities in the refinery while we reassure the public that we comply with the minimum inventory requirements of the government,” added Shell.

Due to low demand, Shell PH temporarily shuts Batangas refinery image

Shell said that the Tabangao refinery can immediately resume operations once market conditions improve and stabilize. Until then, they will rely on fuel supplies via their North Mindanao Import Facility (NMIF) located in Cagayan de Oro City.

Just last Monday, President Duterte temporarily imposed a 10% tax on the importation of both crude oil and refined petroleum products. This was done in order for the Philippine government to raise income amid the COVID-19 pandemic. The local oil companies will shoulder the added cost, but the tax will serve as an added source of income for the country.