Thai Oil accepts its ‘accounting gross integrated refining’ margin during Q2 stood at 7.35 Baht/Litre

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Thai Oil Plc (TOP), Thailand’s leading oil refinery by capacity, reported a staggering net profit of 25.33 billion Baht, a 11.9x jump from the 2.12 billion Baht that the company had reported during the same period of last year as its margins saw a surge.

TOP, which is 45.03% owned by PTT Plc (PTT), reported to the Stock Exchange of Thailand (SET) that during the 2nd quarter of the year the firm had recorded a ‘accounting gross integrated margin’ of around US$ 33.4/barrel, as oil prices continued to surge.

TOP said that for the 6-months ending June 2022, its ‘accounting gross integrated margin) stood at US$ 28.7/barrel, and the company had capacity of 307,000 barrels per day.

Thai Oil’s Q2 2022 Results

“The refining arm was clearly the star of Q2 2022. Market GRM almost quadrupled from US$ 6.4/barrel in Q1 2022 to US$ 25.1/barrel in Q2 2022, a historical high,” Wattana Punyawattanakul, analyst at TISCO Securities came out to say in a report to clients.

A barrel of oil is equivalent to 159 liters which means that $25.1 of margin equates to US$ 0.158/litre of margin on each liter of oil. At 35 Baht to the US$, this translates to 5.53 Baht of margin for every liter of gasoline sold.

If the ‘accounting gross integrated margin’ was considered, then the margin per liter was as high as 7.35 Baht.

The higher margin has been a call made by politicians as the reason for the continued high price of gasoline which has created a larger inflationary pressure on the economy.

Calls to lower the margins has gone on deaf ears but Wattana of TISCO says that the gross refining margins in the region has already fallen to US$ 8/barrel.

“We anticipate Q3 2022e performance softening from the margin peak in Q2 2022. Singapore benchmark GRM has already corrected QTD to US$ 8/barrel (approximately -63% quarter-on-quarter and quarter to date),” Wattana said.

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