Petron takeover seen unnecessary; analysts favor private ownership

By Sheldeen Joy Talavera, Reporter

A GOVERNMENT takeover of Petron Corp. may not be necessary, as the company could operate more efficiently in private hands, according to analysts.

“The better policy is to allow the company to continue as a well-managed publicly listed company so that it can serve customers more efficiently,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet told BusinessWorld.

“Any concern about fuel pricing or supply management can be addressed through other means, such as moral suasion or regulation,” he added.

Petron President and Chief Executive Officer Ramon S. Ang earlier renewed his offer to sell the oil company back to the government, as the country grapples with supply issues and rising prices.

“I first made this offer to Congress in 2021, and it remains open. If the government believes that Petron under its ownership will better serve the Filipino people especially in times like these, we are ready to sit down and make it happen,” Mr. Ang said in a statement on Friday.

Petron is the country’s only integrated oil refining company and held a 27.8% market share as of the first half of 2025.

The company operates 50 terminals across the region and about 2,700 service stations and maintains a refining capacity of nearly 270,000 barrels per day.

Its refinery in Bataan processes 180,000 barrels per day and supplies roughly a third of national fuel demand.

The government previously owned Petron through the Philippine National Oil Co. (PNOC), which acquired Esso Philippines — Petron’s former name — during the 1974 global oil shock.

In 1994, PNOC entered into a stock purchase agreement with Aramco that gave the latter a 40% stake in Petron. London-based investment fund manager Ashmore Group acquired Aramco’s stake for $550 million in 2008.

San Miguel Corp. (SMC) later took control of Petron following an option agreement with Ashmore and began managing the company in 2009.

April Lee Tan, chief equity analyst at COL Financial, said the oil company would be better operated under private ownership rather than government control, citing what she described as the state’s track record in managing businesses.

“One of the reasons they (government) took the company public in the 1990s was recognition that the company would operate more efficiently in private hands. Government has a poor track record of managing businesses in general,” she told BusinessWorld.

She said acquiring a majority stake in Petron could put pressure on the national budget.

“Our current deficit and debt position isn’t very strong as we have not yet recovered from the deterioration caused by the pandemic,” Ms. Tan said.

Instead of acquiring Petron, the government should focus on addressing inflation over the long term, she added.

“Although it may seem a good idea in the short term because there is a war, what if there’s no war?” Ms. Tan said, adding that the government can encourage more exploration activities, create strategic reserves, and improve rail infrastructure.

Recent tensions in the Middle East, including the US-Israeli attack against Iran last month, disrupted supply in the region, contributing to higher fuel prices.