Refineries dispute Kla leader’s claim that Thais have been robbed out of refinery margin

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The oil refinery body on Monday denied accusations made by the Kla Party’s leader Korn Chatikavanij that Thais have been robbed out of the rising refinery margin, saying that the margin is now below pre-Covid levels.

“The material presented by Korn is a compilation of certain information designed to mislead people,” said a statement of the Petroleum Refining Industry Club, a unit under the Federation of Thai Industries (FTI). 

The refinery market has been on a roller coaster since last week, when Korn claimed that refinery margin soared tenfold over the previous year. As a result, the government made a request to refineries for profit contributions to help subsidize fuel costs, causing refinery stocks to fall sharply on Friday.

But as of the morning session, shares of Thai refineries rebounded, especially those with US headquarters. Analysts expect that those firms are unlikely to follow the government’s request to give away their refinery profits.

Star Petroleum Refining Plc (SPRC) jumped 3.54 per cent from its prior closing to 11.70 baht, while Esso (Thailand) Plc (ESSO) rose 2.80 per cent to 11 baht. Bangchak Corporation Plc (BCP) also climbed by 0.85 per cent to 29.50 baht.

The club explained that the refinery margin in Korn’s material were not the actual rate received by the refineries and did not account for other expenses. “The data was chosen from the low-base figures during the Covid-19 outbreak.”

According to the statement, the club added that refinery margin has risen in line with an increase in global energy prices amid Russia-Ukraine war, and that refineries are not able to determine the refinery margin. 

“The margin will rise or fall in relation to the global oil prices, which is driven by supply and demand conditions,” it said. 

Korn also said that he will propose further steps to the cabinet in a bid to reduce the burden of living costs on Thai citizens. He suggested a ceiling on oil refinery margin, a windfall tax on oil refineries, and a serious push for green energy campaign.

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