Thai Refining Shares Slump as Energy Ministry Considers a Price Cap for Oil Refineries

Thai refining stocks slumped Monday the Energy Ministry is considering capping the price of oil sold by Thai refineries in order to better control energy inflation.


As of 10.30 hrs. local time in Thailand, the share price of Thai Oil Pcl. (SET: TOP) dropped THB3.50/share, or 6.17% to THB53.25/share, with a trading value of THB1,142 million. 

The share price of Bangchak Corporation Pcl. (SET: BCP) dropped THB2.00/share, or 5.84% to THB32.25/share, with a trading value of THB169 million.

The share price of Esso (Thailand) Pcl. (SET: ESSO) dropped THB0.70/share, or 5.74% to THB11.50/share, with a trading value of THB139 million.

The share price of IRPC Pcl. (SET: IRPC) dropped THB0.12/share, or 3.43% to THB3.38/share, with a trading value of THB143 million.

The share price of Star Petroleum Refining Pcl. (SET: SPRC) dropped THB0.40/share, or 3.08% to THB12.60/share, with a trading value of THB360 million.


Energy Minister Supattanapong Punmeechaow said last week that a working group has been established to examine methods to minimize the oil refinery margin, which has climbed from an average of THB2.00 per liter to THB5.00 per liter over the past few months.

The group is looking at consumer protection rules and considering a demand for cooperation among oil companies to conduct a temporary refinery margin intervention, which would lower the retail price of crude oil.


FSS International Investment Advisory (FSSIA) estimated that if the Energy authorities reduce the refining rate by THB1.00 per liter, or approximately US$5.00 per barrel, this will affect the profit of the refinery group by more than 20%, with SPRC being the hardest-hit since it operates only a refining business, followed by ESSO, TOP and BCP. Meanwhile, IRPC and PTTGC see limited impact.