Thai Oil Plc (TOP), Thailand's largest oil refinery by capacity, believes domestic demand for fuel has begun to return to pre-pandemic levels, except for jet fuel, consumption of which is expected to be back to normal by the end of next year.
Demand for gasoline stood above 30 million litres a day and will grow by 8% next year, while diesel consumption was more than 65 million litres daily, the same level as before Covid-19 hit Thailand in 2020.
Demand for diesel is likely to grow by 5.4% next year, according to TOP's estimate.
Demand for fuel oil stood slightly above 5 million litres a day, similar to average consumption in 2019, and it is expected to grow by 2.3% next year.
As for jet fuel, consumption is expected to be nearly 20 million litres a day by the end of next year, compared with less than 10 million litres a day earlier this year and less than 5 million litres daily in the third quarter of this year, said Nuttapol Nopparatwong, TOP's manager for investor relations.
"Jet fuel consumption will take longer to recover as air travel resumes in all countries," he said.
Mr Nuttapol expects Dubai oil prices to stay at an average of US$70 per barrel next year, indicating a balance of global oil supply and demand.
Torsang Chaipravat, TOP's vice-president for financial planning, said global oil prices are likely to remain high only for a short time next year, following high demand driven by the winter and a shift of fuel usage to oil from expensive liquefied natural gas and coal.
The International Energy Agency estimates demand for oil will increase to 101.3 million barrels per day (MBD) next year, up from 95.9 MBD.
Oil supply is also expected to increase, with an additional 0.4 MBD of new crude oil from the Organisation of the Petroleum Exporting Countries and 2 MBD from the US, Canada and Brazil.
TOP on Monday reported it had allocated capital spending worth $2.248 billion for use between 2021 and 2024. Most of the budget will go to clean energy projects and productivity improvements.
The company also plans to reduce its operating costs.