Shell Pilipinas Corp. recorded a PHP1.9 billion core net loss in the first half of 2026,and a higher PHP2.7 billion net loss, which included inventory effects and one-off items, as a difficult operating environment weighed on the company’s earnings.
Based on its disclosure to the Philippine Stock Exchange, the reported net loss included approximately PHP1 billion in inventory holding losses as oil prices subsequently declined from earlier peaks, partially offset by around PHP600 million in one-off gains from the sale of remaining crude inventory and related items. The net loss also reflected higher working capital requirements needed to maintain supply and support customers during the disruption.
During the period, Shell Pilipinas generated PHP2.4 billion in free cash flow, maintaining liquidity and supply reliability amid a volatile global energy market.
Lorelie Quiambao Osial, president and CEO of Shell Pilipinas, said the results were mainly affected by inventory holding losses, compressed margins as rapid increases in product costs outpaced domestic pricing adjustments, and softer demand for premium fuels.
“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,” said Osial.
“By leveraging Shell’s global Trading & Supply network, local infrastructure, and strong customer relationships, we maintained reliable supply through one of the most volatile market environments in recent years. While these conditions materially affected earnings, improving trends in May and June reinforce our confidence in the resilience of our business as we navigate a still-volatile environment.”
Pricing pressures
According to Osial, the sharp increase in oil prices, a weak peso, and uncertainty over potential supply disruptions increased pressure on fuel costs, working capital, and customer affordability.
As a global player, she said Shell Pilipinas drew on its integrated supply chain, local terminal footprint, and close coordination with government and industry stakeholders to maintain product availability, support customer affordability, and actively contribute to the public utility vehicle fuel discount program, with one of the broadest mobility site nominations among industry participants.
These market and pricing dynamics compressed industry margins, as higher product costs could not always be fully or immediately reflected in retail and commercial prices.
Restoring profitability
In commercial fuels, Shell Pilipinas reported 4 percent volume growth in June, supported by increased demand from the power sector and reseller channel.
Mobility volumes declined 4 percent as high pump prices affected consumer demand, while lubricants provided resilient earnings support, aided by continued customer demand and the expansion of the Shell Flagship Workshop network.
Market conditions began to improve in late May and through June as fuel prices moderated and mobility demand recovered.
Shell Pilipinas remains focused on restoring profitability through disciplined cost and working capital management, margin recovery, reliable supply execution, and improved competitiveness across its integrated portfolio.
“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.
