Shell Pilipinas bludgeoned by Middle East war

MANILA, Philippines — Shell Pilipinas Corp. plunged into a P2.7-billion loss in the first semester, battered by weaker demand and oil price volatility triggered by the Middle East war.

This was a sharp reversal from P965 million in net income logged in the same period last year.

READ: Shell Pilipinas ends 2025 with P2.1-B profit

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Net sales, meanwhile, increased by 28.8 percent to P146.97 billion on the back of surging pump prices, especially during the peak of the bombing attacks, which had begun late in February, in the oil-producing region.

However, cost of sales, or expenses linked to producing or delivering products or services, climbed 36 percent to P140.45 billion.

The oil giant said the massive losses were “mainly driven by the steep decline in fuels marketing margins due to the timing lag between rapidly rising global product costs and local market pricing.”

Shell Pilipinas noted that its inventory holding losses ballooned to P1 billion, following the price cuts in fuel prices.

To recall, an executive of the group said that the government-mandated pump price adjustments could dampen investor sentiment.

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Under a state of national energy emergency, the Department of Energy has the power to limit fuel price increases as well as impose rollbacks.

READ: DOE: Energy emergency may be lifted in third quarter

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Many fuel companies raised their concerns about the impact of the government intervention meant to soften the blow on consumers, as they feared operating at a loss.

Turnaround seen

Shell Pilipinas, for its part, remains focused on regaining its financial strength, with optimism banking on “improving market conditions” beginning late May.

“The first half tested the resilience of energy supply chains across the industry. Our priority was clear: keep fuel available, support our customers and trade partners and help keep the Philippine economy moving,” Lorelie Quiambao Osial, president and CEO of Shell Pilipinas, said in a statement.

“As we move into the second half, our focus is to restore profitability, strengthen cash generation and further improve Shell Pilipinas’ competitiveness. The actions we have taken position us to continue serving the country’s energy needs while creating long-term value for our shareholders,” Osial added. INQ