The mystery of the oil business

the wind changes direction

25 Jun 2022 6:10 a.m.

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Easy Saturday today. Let's talk about.

"Oil business"

. Oil is expensive. From the US and European sanctions on Russia, people are suffering all over the world.

The oil business is a very complicated business.

until it is difficult for ordinary people like us to know

I only know that oil is very expensive. Until today, the Ministry of Energy and the National Energy Policy Council, with

Gen. Prayut Chan-o-cha

as the chairman, have met for a number of times.

Still don't know how many baht per liter of Thai oil refining cost.

So how to solve the problem of high oil prices?

Today I'm going to take you readers to look at the complexity of the oil business.

Let's start with the

refining value that is the problem at this time

.

fireworks

Today's refining cost is expensive.

10 times more than last year, but the Petroleum Refinery Industry Group countered that this is not true. In the first quarter of this year, the refining margin was only 0.47 baht per liter. The problem is that the refining cost is not fixed.

There is an increase in the price of oil, such as the premium of crude oil.

transportation costs of oil, energy used in refining, etc., including labor costs that are regularly adjusted

Investing in machines to increase efficiency

and more intense legal compliance

The refinery cannot determine the refining value because the refining value is the result of the average price of all actual oils sold in proportion to production.

minus the actual purchase price of crude oil, including the premium of crude oil

Transportation costs, insurance costs, refining energy costs

to the supply and demand of crude oil and refined oil

and oil stock

The distillation value, which is described here, is very brief.

But the bigger problem with the GRM is that

Sufficient supply of crude oil

I just read from the journal

“Banking Finance”

in June .

who went to interview with Mr. Disatat Panyarachun, Executive Vice President of PTT's International Trade Business Unit, listened to the process of crude oil procurement

More complicated and more complicated than the cost of refining. More importantly, Thailand has to rely on crude oil imports up to 90% of the domestic demand. Therefore, the fluctuation of crude oil prices in the world market has a direct impact on Thailand.

Mr Disat said that

the Russian-Ukrainian War

Causing Russian crude oil to disappear from the world market 3 million barrels per day from normal 6-7 million barrels, causing War Risk Premium and additional sanctions.

Causing crude oil prices to rise to a high of 120-150 dollars per barrel, but Khun Disat said that Thailand was not affected much, PTT Trading has prepared an emergency plan.

If Russian oil disappears from the world market in large quantities

We have a risk management plan for crude oil supply.

Refined oil and gas from many sources, as well as coordinating with refineries in the PTT Group to ensure the highest level of oil reserves.

Temporarily suspend the export of refined oil

Implemented a cruise tracking system.

let the boat travel on time

There is an oil storage tank ready to use.

to store additional crude oil reserves

causing Thailand to have at least 640 million liters of crude oil reserves

In addition,

PTT Trading

has also negotiated to request temporary credit lines from various banks.

Shorten the spending time of money.

Study other financial instruments

to support short-term liquidity

and having to manage the price risk of

Physical Cargo

through the futures market.

Oil and gas prices rose sharply.

causing many companies to call for more collateral

Therefore, risk management must be managed by forecasting price fluctuations from various

indexes

in order to manage liquidity sufficiently and timely, etc.

This is just abbreviation.

I still have a headache after listening

There are more details about the

oil

trading .

Anyone interested can read it.

The mysterious oil business is really complicated.

Thailand is lucky to have

PTT is the main pillar to provide sufficient oil and gas.

Today, the price of crude oil is more expensive around the world.

The only way that Thai people can help each other is

"Save fuel in every way" must have the slogan of trucks

"Talking to your girlfriend has to turn off the lights" back to use again.

help find a solution

Don't help each other find a way to fight.

"The wind changes direction"

Read more...