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Three non-PTT refineries Star Petroleum Refining, Esso (Thailand) and Rayong Purifier would soon be asked to join a move to cut the refining margin for diesel, said Energy Minister Poonpirom Liptapanlop.

 Energy Permanent Secretary Pornchai Rujiprapha is making appointments with the three refineries after Thai Oil, PTT Aromatics and Refining, Bangchak Petroleum and IRPC agreed to cut the ex-refinery price by no more than Bt1 per litre.

 Viraphol Jirapraditkul, director-general of the Energy Policy and Planning Office, said the policy was appropriate at a time when the gap between crude and refined diesel prices had widened due to soaring demand from China and India, against unchanged refining cost.

Last year, the gap was Bt3.65 per litre. But between March and May, that widened to Bt5.75.

During April-May, the gap was Bt7-Bt9.

"EPPO has been assigned to closely monitor the gap, to ensure the appropriate level," he said, adding the public should also save energy by keeping driving speed under 90kph, use car pools and switch to using alternative fuels.

Following the reduction, shares of the four refineries on Monday fell.

Thai Oil and IRPC share prices made some recovery yesterday while the prices of Bangchak and PTTAR were still weakening.

There was no change in Esso and Rayong Purifier prices.

Of seven refineries, only Star Petroleum Refining is not listed.

 Tisco Securities said concerns on the financial impact have been "overblown", saying the margin cuts will only have a marginal impact on the refiners.

"In a worst case scenario, the firms may see a 15-25 per cent drop from their set targets," he said.

If ex-refinery prices are reduced by Bt1 per litre in the second half, Tisco would reduce its earnings targets for oil refineries by 15-25 per cent.

Bangchak would be the most affected because it is purely in the oil business and has a low earnings base.

The least affected of the group should be Thai Oil and IRPC as their earnings are cushioned by their utilities and petrochemical divisions.

 Tisco also revised down the earnings forecasts for PTTAR last week to reflect high condensate prices, which have hurt its petrochemical business.

 "Thai Oil remains our favourite refinery. Its share price has fallen by 17 per cent during the past four weeks, widening the upside potential to our target price of Bt92.50 by 48 per cent.

"Government intervention has weakened sentiment in the refinery sector, however, and we prefer integrated oil and gas company PTT whose share price offers 24 per cent upside to our target of Bt446," it firm said.

Other  risks to the firms are oil price volatility, fluctuations in refining margins and delays to new projects, it said.