MANILA — Saudi Aramco (TADAWUL:2222) is set to make its retail comeback in the Philippines with the opening of its first branded service station on July 16, 2026. The station, located on Sucat Road in Parañaque, will take over an existing Unioil site, marking a modest but strategic entry into the Philippine fuel retail market.
The launch comes after Aramco acquired a 25% stake in Unioil Petroleum Philippines and a 25% stake in fuel supplier Unioil Energy in a deal valued at 295 million Saudi riyals (approximately $79 million). At the time of the deal's closure, Unioil operated 184 stations, giving Aramco a raw cost of about 1.60 million riyals per outlet. In comparison, Aramco paid 279 million riyals for a 40% stake in a Pakistani operator with over 1,200 outlets, resulting in a per-outlet cost of under 0.23 million riyals — making the Philippine deal 6.9 times more expensive per outlet.
However, these figures are not direct station valuations, as the two deals involve different stakes and asset mixes. The Philippine transaction includes fuel sourcing, wholesale trading, specialty oils, and asphalt, while the Pakistan deal is in a separate line of business. The higher per-outlet cost in the Philippines reflects Aramco's strategy of seeking quick entry, local fuel supply, and prime city locations rather than building a network from scratch.
Unioil's network has grown since the deal was announced in February 2025, expanding from 165 stations and four terminals to 184 stations — an 11.5% increase. This growth provides a solid foundation for Aramco's first branded station, which is essentially a rebranding exercise rather than a new addition to the network. "Another step forward in our global strategy to expand Aramco's retail network," said Yasser Mufti, Aramco's executive vice president for products and customers.
Despite this progress, Aramco faces significant scale challenges in the Philippine market. Petron Corp (PSE:PCOR) operates about 1,800 stations nationwide, while Shell Pilipinas Corp (PSE:SHLPH) runs around 1,100 mobility sites. Unioil's network of 184 stations is roughly one-tenth the size of Petron's and one-sixth of Shell's, underscoring the steep climb ahead for Aramco's retail ambitions.
Aramco is no stranger to the Philippines. It previously held a 40% stake in Petron after the company was privatized in 1994, before selling out in 2008. This time, the company is adopting a lighter minority-capital approach, ceding day-to-day operations and expansion to its local partner. The business case hinges on faster station conversions, higher liters sold per site, and capturing a larger share of higher-margin fuel and non-fuel sales. Going national will not be enough; Aramco needs to demonstrate strong per-site economics.
The broader market context adds pressure. Philippine fuel prices rose last week, with diesel up 3.30 pesos per liter and gasoline increasing 0.20 to 0.25 peso from July 7. Industry watchers expect further hikes this week, with diesel possibly rising 2 to 4 pesos per liter and gasoline up to 1 peso on July 14. Jetti Petroleum President Leo Bellas noted that demand has recovered but is "not back to 100 percent yet" as prices remain elevated compared to pre-war levels. Aramco's new station is set to open just two days after these anticipated increases.
Global crude markets are also tightening. Brent crude settled at $76.01 on Friday, up 5.5% for the week, while U.S. crude finished at $71.41, up about 4%. John Kilduff of Again Capital described the market as "ready, willing and able to jump on good news" as traders monitor shipping through the Strait of Hormuz. Diesel supplies are particularly constrained, with Russian diesel and gasoil exports dropping to 234,000 barrels per day in the first 10 days of July, down from 400,000 barrels per day in June and well below the 2025 average of about 817,000 barrels per day. Qilin Tam, head of refining at FGE NexantECA, noted that competing demand for diesel shipments across regions is intensifying.
The investment case for Aramco's Philippine foray carries risks. The company has not disclosed a station-conversion target, sales volume estimates, or margin targets. Its 25% stake gives it influence but not control, and the first location is merely a rebranding rather than new capacity. If fuel prices remain high for an extended period, demand could soften, complicating efforts to launch a premium offering and recoup the higher upfront per-site costs. After July 16, key metrics to watch include the pace of conversions, liters sold per site, and any new terminal or supply deals. For now, the Parañaque site demonstrates Aramco's ability to move quickly, but it remains to be seen whether Philippine margins will justify the investment.
