Profit statements

Refiners deny profit count

Refiners deny profit count

Calculation made in error, says club

Vehicles refuel at a PTT petrol station in Pathum Thani as retail oil prices continue to rise. (Photo: Apichit Jinakul)

The Petroleum Refining Industry Club, a unit of the Federation of Thai Industries, insisted that the current gross refining margin (GRM) was reasonable, refuting the accusation that oil companies were overcharging customers for refined oil.

GRM, the difference between crude oil and refined oil prices, refers to the costs added to the price of crude oil during the refining process. It ends up being part of the retail price of oil that drivers pay at gas stations.

Last week, Kla party leader Korn Chatikavanij cast doubt on the high GRM and called on the government to cap the refining margin and impose a windfall tax on oil refineries to control retail prices of oil. oil, which continue to rise in the middle of Russia-Ukraine. war.

He said oil refinery margins increased 10-fold per liter to 8.5 baht on June 10 from 0.87 baht on June 10 last year and 0.88 baht on June 10. June in 2020.

The club said the accusation that oil companies are making high profits is a misunderstanding.

“A multiplication by ten to more than eight baht is inaccurate,” according to a statement from the club on Monday.

The average GRM increased by just 0.47 baht per liter to 1.19 baht per liter in the first quarter of this year, compared to an average GRM of 0.72 baht per liter in 2018 and 2019, the club said.

Average refinery margins during the pandemic years of 2020 to 2021 have remained very low. If used to compare with the GRM calculated when infections slowed in the first quarter of this year, people will be misled into thinking the GRM has increased to an unusually high level, the club said.

Crude oil is processed into different types of refined petroleum, including diesel, gasoline, jet fuel, liquefied petroleum gas, and fuel oil. Some are unprofitable, leading oil companies to offer “average” ex-refinery prices, based on the benchmark price for refined oil in Singapore.

According to the club, various expenses are incurred during the oil refining process, ranging from a premium on crude oil, transportation, operating costs and insurance costs.

The crude oil premium is added to the price of crude oil by producers, citing many factors, including insecurity of oil supply during the war.

Oil refineries must also allocate a budget of 50 billion baht to improve production technology to produce diesel that meets the higher environmental emission standard of Euro 5, according to the club.