Thailand
Thailand: Oil prices have authorities on edge
The global oil price surge to US$100 a barrel as a result of the Ukraine invasion has the Energy Ministry concerned, prompting it to ensure sufficient oil and gas supply for Thailand.
Brent crude oil hit $102.48 a barrel, the highest since 2014, as Russia attacked Ukraine.
Some media reports speculate the confrontation will affect global petroleum supplies.
Thailand has not yet seen any impact on oil and liquefied natural gas (LNG) imports because the country mostly buys crude oil from the Middle East, which accounts for 55% of total crude oil imports, said permanent energy secretary Kulit Sombatsiri.
Only 3% is bought from Russia, which is turned into 5.22 million litres of refined oil per day.
Mr Kulit is not worried about LNG imports, which account for 18% of total LNG supply, as Thailand buys from many regions.
According to the ministry, the national crude oil reserve stands at 3.2 billion litres, with another 1.46 billion litres being transported to the country.
The total volume of refined oil is currently 1.67 billion litres.
Thailand has fuel reserves of more than two months, with enough crude oil to last 27 days and refined oil for 12 days, he said.
The liquefied petroleum gas (cooking gas) reserve can serve households for 16 days, said Mr Kulit.
“The greatest concern is energy prices being affected by the invasion and limited global oil production. These will continue to drive up oil prices,” he said.
Chairit Simaroj, managing director of local oil retailer Susco Plc, said small and middle-sized oil retailers have already begun to adjust their prices, but giant oil companies like PTT Plc and Bangchak Corporation are slowly raising prices.
WIDE IMPACT
More pressure on energy prices raises worries over higher inflation as well as a negative impact on international trade and tourism.
“As global oil prices continue to rise, this affects the cost of energy and logistics in the global supply chain. Thailand is hurt too, as indicated by the rising prices of goods and services,” said Sanan Angubolkul, chairman of the Thai Chamber of Commerce.
“If the conflict escalates, it will definitely aggravate the supply shortage caused by the pandemic. The tension would also affect exchange rates, travel and tourism.”
Finance Minister Arkhom Termpittayapaisith said international trade and tourism may be affected as Russia and Ukraine are Thai trading partners and many tourists come from both countries.
Thailand should expect higher import costs because of rising oil prices and the tight supply of raw materials, said Ronnarong Phoolpipat, director-general of the Trade Policy and Strategy Office.
Thailand imports various commodities from Russia and Ukraine such as mineral fuel, iron, steel, fertiliser, aluminium and cereals.
Thailand’s domestic retail petrol prices may increase by up to six baht if global oil prices reach $120 per barrel, said Mr Sanan, citing a recent forecast by the University of the Thai Chamber of Commerce.
Source: https://www.bangkokpost.com/business/2269763/oil-prices-have-authorities-on-edge