(Updates nut graph, adds context on RINs, renewable diesel project)
Feb 11 (Reuters) - U.S. refiner PBF Energy Inc reported a bigger-than-expected loss in the fourth quarter, hit by uneven demand for fuel due to COVID-19 restrictions and a lower refining margin.
The company joined other U.S. independent refiners in reporting multi-billion dollar losses in 2020 as demand has struggled to regain footing after multiple waves of coronanvirus-induced travel restrictions were enacted globally.
The refiner reported a loss of $1.4 billion in 2020, following its competitors Valero, Marathon Petroleum and Phillips 66. In 2020, U.S. fuel demand fell 12% from the previous year due to the pandemic.
“PBF’s fourth-quarter, and full-year, results reflect the continuing headwinds brought on by the global pandemic and attendant demand destruction for our products,” Chief Executive Officer Tom Nimbley said.
He added that although there are some signs of improvement, “we expect demand to remain depressed until vaccine distribution is improved, so that everyone can return to their normal routines.”
U.S. refining margins were below $10 - the threshold above which most refiners make money - for the majority of the fourth quarter of 2020.
The resurgence of coronavirus cases across the world has complicated the recovery in fuel consumption worldwide.
PBF also said it expects refining capital expenditures to be about $150 million for the first six months of 2021. It aims to reduce operating expenses across the company by $200 million to $225 million annually.
It expects near-term throughput for the company’s refining system to be between 675,000 barrel per day and 725,000 bpd.
Total crude oil and feedstocks throughput in the quarter was 62.3 million bpd, down from 65 million bpd in the third quarter.
On a sequential basis, gross refining margin, excluding special items, declined 68.5% to $60.8 million.
The company’s adjusted loss widened to $547.4 million, or $4.53 per share, in the fourth quarter ended Dec. 31, from $346.6 million, or $2.87 per share, in the third quarter.
Analysts were expecting a loss of $3.17 per share, according to Refinitiv IBES.
PBF also said it completed its East Coast refining reconfiguration and is continuing a strategic review of its portfolio.
PBF plans to engage the Biden administration about potential changes to the Renewable Fuels Standard after RINs prices climbed tenfold in 2020, said company president Matthew Lucey.
“The prior administration made attempts to level the playing field but left the situation worse than when they started,” Lucey said.
The refiner said it is assessing the possibility of a renewable diesel project at the Chalmette, Louisiana refinery that could produce 15,000 to 20,000 barrels per day of the fuel.
“Chalmette happens to have an idled hydrocracker with an ample supply of hydrogen,” said Lucey.
Reporting by Laura Sanicola in New York and Arunima Kumar in Bengaluru; Editing by Shailesh Kuber and Andrea Ricci