THE "BANGKOK shutdown" caused Thailand's demand for motor fuel to fall significantly last month, said executives of the country's largest oil refinery.
Thai Oil chief executive officer Veerasak Kositpaisal also told a press conference yesterday that the company, together with its parent firm PTT, would shortly submit a proposal to invest in an oil-refinery project in Myanmar, in a joint venture with that country’s government.
While an earlier report from PTT suggested a resilient oil market, Thai Oil executives yesterday revealed that Thailand’s petrol consumption last month had decreased by 5 per cent year on year, and 7 per cent from December, “mainly because of the Bangkok shutdown”.
Diesel demand also dropped by 3 per cent in January from a year earlier and 1 per cent month on month, because the political protests had brought down economic growth, said the company.
Demand for petrol and diesel is expected to continue to fall this month, though at a lower rate. The February petrol market is likely to decrease by 2.8 per cent year on year but increase 2.6 per cent month on month thanks to a reduction of protest zones in Bangkok, according to Thai Oil.
Demand for diesel is forecast to decrease by 1.9 per cent this month from February 2013 but rise by 1.5 per cent from this January.
A few weeks ago, a PTT executive was quoted as saying that the “Bangkok shutdown” had caused the oil giant to close four petrol stations and 10 gas stations since January 13 because fuel trucks could not reach them. But this had an insignificant impact on national oil sales, the executive said at the time.
Anti-government demonstrators led by a former key member of the opposition Democrat Party, Suthep Thaugsuban, have laid siege to some of Bangkok’s major intersections and government offices since the middle of last month, continuing their protests against the Yingluck Shinawatra administration that started in November.
At yesterday’s press conference, Veerasak said the business outlook for Thai Oil had not changed much from 2013. Because of a 55-day shutdown of one of its refining units in June, it expects to run its refining facilities at 95 per cent of their full capacity this year, compared with its normal utilisation rate of 101-102 per cent. But this will be offset by a slightly higher gross refining margin expected this year.
Thanks to a much lower additional output of refined oil in the Asia-Pacific and Middle East regions this year, gross refining margin at the regional benchmark Singapore market is forecast to edge up from US$3.35 a barrel last year to $3.50-$4.
Veerasak said the Myanmar government had agreed for Thai Oil/PTT to join in a fierce contest to bid for a project to upgrade the Thanlyin oil refinery, which currently has a capacity of 40,000 barrels per day, since most other bidders are large multinational companies. The government is expected to consider the refinery proposal by the end of this year. The project will aim to serve Myanmar’s rapidly growing oil demand, currently estimated at 80,000bpd.
The Myanmar government has made known its plan to privatise the refinery, which is strategically located at Thanlyin, formerly known as Syriam, home to Thilawa port, the largest deep-sea facility in the country.
As Myanmar’s population is similar to Thailand’s but it is larger geographically, its oil demand could easily grow to 200,000-300,000bpd in a near future, he said.
Meanwhile, Veerasak said Thai Oil expected to announce by the end of this year whether it would invest in a project to produce wax.