Malacañang’s imposition of price control on petroleum products in Luzon has been frustrating Petron Corporation’s hope of achieving a financial rebound this year.

The leading oil firm indicated that its bottom line faces grim scenario, as it estimated that the impact of Executive Order 839 or the price freeze directive will cause it P1.5-billion losses in the fourth quarter alone. Last year, Petron suffered a staggering net loss of P3.9 billion.

“With this price control, Petron is estimated to incur a net loss of P1.5 billion in the fourth quarter of 2009 alone as it begins to ‘digest’ higher priced crude oil inventory in November and December,” the oil firm noted in its disclosure to the Philippine Stock Exchange.

Because of the financial brunt that the EO has been triggering on oil companies’ balance sheets, Petron takes the initiative at proposing that the government must share the burden in this whole exercise — by way of lower tariffs so their expected huge losses can at least be mitigated.

The oil industry players raised great hue and cry since the price control is being enforced at a time when prices of crude and finished petroleum products were on relentless up-ticks in the world market.

The Presidential EO has been disturbing not only for the oil industry, but even for fundamentals in the entire business community because of rising fears that this government can just arbitrarily lay down policies at its whims.

Apart from huge losses, Petron echoed universal industry concerns which may consequently render collateral damage not only to the sector but even to the Filipino consumers.

In the hierarchy of concerns, the dominant industry player reiterated that the price freeze triggers “possible supply shortage as some oil players may opt to stop selling fuel products altogether instead of selling at a loss.”

When that happens, Petron already advanced word that it would be impossible for it to supply the shortfall.

The company similarly raised questions, that “the EO does not state any duration for the price freeze,” as well as the specific areas affected (i.e. in Palawan’s case which was not hit by typhoons) and the list of fuel products to be covered.” As already articulated by the other oil companies, Petron noted it is joining the rest of the industry in seeking clarifications on these major concerns.

“This would have a negative effect on future investments in the capital intensive oil industry,” the company stressed.

Petron likewise explained that retail stations in Luzon are already on extreme price wars, hence, actual retail prices are often lower than suggested retail prices.