Bangkok: "Attaphol" confirms there is enough oil for 95 days, orders retailers to increase reserves by 3%. "Attaphol" affirms that there is enough oil for domestic use for up to 95 days and is preparing to announce a ban on fuel exports, except to Laos and Myanmar. He also revealed that energy conservation measures will be submitted to the Cabinet on March 10th and ordered oil retailers to increase their stockpiles by 3% to reassure the public.
According to Thai News Agency, Mr. Atthapol Rerkpibul, Minister of Energy, announced after a meeting discussing energy measures affected by the conflict in the Middle East that today's meeting was to assess oil reserves. Previously, it was stated that sufficient oil reserves for domestic use would last 65 days. However, with gradual imports of oil from sources outside the Middle East, this will allow for an additional 30 days of use. This is a continuous replenishment, so it doesn't mean that Thailand will run out of oil after 60 days.
Regarding the enforcement of oil export regulations, the Prime Minister will issue an order exempting Laos and Myanmar due to their interdependence on energy sources. Thailand primarily purchases hydroelectric power from Laos and natural gas from Myanmar.
Furthermore, there will be additional announcements. Because Thailand has limited production capacity, once we suspend exports, we will announce an increase in the oil reserve requirement for traders from 1% to 3% to help ensure increased domestic oil stockpiles.
Regarding diesel fuel prices, Mr. Atthapol confirmed that they remain unchanged, frozen for 15 days using the Oil Fund mechanism. As for natural gas, which is mostly used to generate electricity (approximately 50-60%), it comes from pipelines in Myanmar and Thailand.
While some LNG will come from Qatar, passing through the Strait of Hormuz, which was anticipated to cause problems, some shipments have already passed through the strait. However, there are three ships that haven't yet departed, but we're not waiting. We've asked the Energy Regulatory Commission (ERC) to approve procurement from other sources to compensate. PTT has confirmed that the purchase order will be finalized next week. Meanwhile, traders have already submitted proposals, so there's no need to worry about shortages. Negotiations regarding natural gas for electricity generation continue, and the Electricity Generating Authority of Thailand (EGAT) will increase electricity production from coal to ensure there will be no shortages of oil, gas, or electricity.
Regarding the increased public hoarding of fuel, Mr. Atthapol believes it's merely a temporary phenomenon. He observes that if public confidence increases, as evidenced by the clear assurance of price controls and sufficient supply at gas stations, the situation will improve significantly, and people won't panic. He thinks the stockpiling issue won't have a major impact because consumers will use the fuel immediately after purchase. Meanwhile, the Department of Energy Business has instructed all provincial energy offices to prohibit gas stations from hoarding or storing fuel, and to coordinate with fuel suppliers to ensure sufficient supply. While there might be some temporary bottlenecks, he anticipates the problem will resolve itself within 1-2 days due to Thailand's transportation system.
Regarding the measures to be taken if the 15-day diesel price freeze expires, Mr. Atthapol stated that the Fuel Fund mechanism will help mitigate price fluctuations. Therefore, during price increases, the fund will be used to support prices, but during price decreases, there may be a need to recoup some of the losses. He noted that in the past, during crises, the Fuel Fund was in a deficit of over 120 billion baht. Around October, when this government came into power, the deficit was approximately 20 billion baht. However, prior to this situation, as conditions improved, the fund was managed to return to a positive balance. He emphasized that the fund will function as it has in the past and therefore, there shouldn't be any problems. Furthermore, after 15 days, the situation will be assessed to determine if the conflict will be prolonged and how much further intervention the fund's mechanisms can be used. He believes the fund has sufficient capacity for this.
Mr. Atthapol further stated that the meeting discussed finding additional oil sources from the United States, South Africa, and Malaysia. Representatives from PTT also attended the meeting today. PTT already has trading partners when it sells oil, and in the event of a crisis, it can request to purchase from these partners.
Regarding the use of palm oil as an additive in diesel fuel, Mr. Attapol explained that it must be done in stages. Currently, exports will be suspended, and reserves will be increased because refineries' production capacity exceeds consumption. Therefore, once exports are suspended, refineries will have to assess whether to reduce production and increase domestic reserves.
However, Mr. Atthapol stated that if shortages worsen in the future, they will consider utilizing domestically available energy sources. This could involve processing palm oil chemically to produce "biodiesel," which would then be blended with diesel in various ratios, such as B7 and B10. This consideration will take two steps: 1. If a shortage arises, it can be implemented immediately. 2. If the global price of diesel is higher than biodiesel, the proportion of palm oil can be increased to reduce costs without waiting for a shortage. Furthermore, taking it a step further, they believe it's not necessary to rely solely on crude oil imports; refined oil products could also be imported from a wider range of sources by lowering the specifications of Thai oil.
Finally, Mr. Atthapol stated that the Ministry of Energy will present energy conservation measures to the Cabinet meeting on Tuesday, March 10th.