SAN ANTONIO – Editor’s note: This story was published through a partnership between the San Antonio Business Journal and KSAT.
San Antonio-based refiner Valero Energy Corp. has taken steps to reduce its output in light of the drastic drop in gasoline demand, but it likely won't be enough to prevent a billion-dollar loss for the first quarter, the company reported Monday.
Valero (NYSE: VLO) issued new guidance on its first quarter 2020 results, predicting a net loss attributable to shareholders of $1.8 billion to $2.1 billion on revenue of $20.1 billion to $22.2 billion. The results are scheduled to be announced April 29.
The selling price of ethanol, in particular, has fallen sharply, and as a consequence, Valero has temporarily suspended operations at eight of its plants and reduced output at the remaining six. At least one of its ethanol plants is producing hand sanitizer. It is not known which plants were closed, nor when they were closed and when they will reopen, if they haven't already.
The refining sector has not been spared from the oil price downturn. While barrels of crude oil are selling for less than they have over the past two decades, fewer people are driving personal vehicles or flying due to measures to slow the spread of COVID-19. That, in turn, has led to lower prices at the pump, which impacts Valero’s bottom line.