Oil refiners deny Korn's claim of profiteering during hardship
published : 20 Jun 2022 at 15:22
writer: Online Reporters
Oil refinery bosses on Monday broke a long silence to deny Kla Party leader Korn Chatikavajin's accusation they are reaping fat benefits though the gross refinery margin while consumers suffer from high pump prices.
The Petroleum Refining Industry Club issued a statement rejecting Mr Korn's claim that refineries were enjoying a rapid surge in the gross refinery margin that resulted in people paying high diesel and petrol prices and the Oil Fuel Fund plunging deeper into the red.
The margin is the difference between the total value of the refined products and the cost of the crude oil and other feedstock use to produce them.
The Kla Party leader said on June 12 that the gross refinery margin had risen 10-fold since June 2020, from 0.88 baht to 8.56 baht per litre. He called on the government to cap the gross refinery margin to keep energy prices down.
"Thai people are being robbed by the gross refinery margin," Mr Korn said.
The club, which groups seven major energy companies, said the average gross refinery margin was only 0.47 baht per litre based on figures since 2018 to the first quarter of this year.
The gross refinery margin in June 2020 was low due to low demand for fuel caused by the Covid-19 pandemic, the statement said.
The club is under the Federation of Thai Industries. Its members are Thai Oil Plc, Bangchak Corp Plc, PTT Plc, PTT Global Chemical Plc, Star Petroleum Refining Plc, Esso (Thailand) Plc and IRPC Plc.
- Explainer: Moving to curb pump prices
Instead of capping the gross refinery margin as Mr Korn wanted, the government last week "asked for cooperation" from oil refineries that they set aside about 8 billion baht of their profits to contribute to the Oil Fuel Fund for three months, from July to September. The contribution would be from diesel and gasoline refineries, and gas separation plants.
The Oil Fuel Fund had dipped 5 billion baht deeper into debt on June 12, to 91 billion baht from 86 billion baht on June 5, according to the latest figures on its website. The fund is being used to cap the pump price of standard diesel at 35 baht a litre.