Although oil prices are expected to drop, the gross refining margin (GRM) is expected to improve next year because of an improving world economy, says the Federation of Thai Industries' (FTI) Petroleum Refining Industry Club.
Club chairman Surong Bulakul, who is also chief financial officer of PTT Plc, said the GRM is estimated at $5-6 per barrel in 2014, compared to $4-5 this year.
Dubai crude is expected to trade at $104 a barrel next year, down from $107 this year, due to the supply of low-cost shale gas in North America, he said.
"The oil supply will not be tight. At the same time, there is no new refinery capacity coming on stream next year," said Mr Surong.
The club reported yesterday Thailand's oil demand grew 3.2% to 137.78 million litres per day in the first 10 months from 133.46 million the year before. Refinery capacity utilisation was 86% during the period.
Gasoline demand rose 8.4% year-on-year to 22.4 million litres, as diesel use grew 2.4% to 56.99 million. Fuel oil consumption contracted 11.3% to 5.94 million litres.
As the Department of Energy Business and police strictly monitored smuggling of liquefied petroleum gas (LPG) to neighbouring countries, LPG consumption fell 24.8% to 4.761 million tonnes from 6.37 million last year, said Mr Surong.
The LPG retail price rose 50 satang per kilogramme every month starting in September, so the subsidy derived by the Oil Fund has dropped by 736 million baht per month from nearly 4 billion the previous year.
Meanwhile, the increase in oil reserves to 43 days from 36 days starting last month raised costs for refineries and oil traders by 12-15 satang a litre.
"Higher oil reserves are crucial for Thailand as over 85% of crude oil imports come from the Arabian Gulf. Oil security would be at risk if a severe political conflict or accident happens in that area," he said.
If crude supply from the Arabian Gulf is disrupted, oil from Africa or Latin America would take over a month to be shipped to Thailand, said Mr Surong.