Cambodia’s decision to halt refined oil imports from Thailand is unlikely to significantly affect Thai oil companies, as they have the flexibility to redirect their sales to other Asian countries, according to the Department of Energy Business (DOEB).
Thai oil exporters currently send nearly 6 million litres of oil daily to Cambodia, which could instead be redirected to markets like Singapore, said OEB Director General Sarawut Kaewtathip.
Thailand’s six oil refineries, operated by Thai Oil, IRPC, PTT Global Chemical under PTT Group, Bangchak Corporation, Bangchak Sriracha under Bangchak Group, and Star Petroleum Refining, collectively produce approximately 160 million litres of refined oil per day, with 130 to 135 million litres consumed domestically.
Sarawut expressed confidence that the remaining oil could easily find alternative markets. The oil import suspension by Cambodian Prime Minister Hun Manet, effective from midnight on June 22, was enacted in response to a border dispute with Thailand.
Cambodia relies entirely on imported oil, averaging 10 million litres daily, and Thailand was previously its leading supplier due to competitive pricing, an Energy Ministry official disclosed.
Shipping costs for oil from Thailand to Cambodia are 1 baht per litre cheaper than from Singapore, and also lower than from Malaysia and Vietnam. Cambodia intends to increase oil purchases from these countries.
Thai refineries are primarily situated in the Eastern Economic Corridor, near Cambodia, offering logistical advantages. The suspension means Cambodia will miss the benefits of reduced shipping costs, the official remarked.
For Thai oil companies, if they are unable to export to other countries, they might reduce production and focus on major maintenance of their facilities.
In the previous year, Thailand exported 2.29 billion litres of oil to Cambodia, accounting for 21.1% of its total fuel exports, as reported by the Energy Ministry.
PTT Oil and Retail Business, a subsidiary of PTT Group listed on the Stock Exchange of Thailand, previously indicated that Cambodia’s import ban would not significantly disrupt its operations at its 186 petrol stations in Cambodia.
PTT Cambodia Ltd, the group’s subsidiary, plans to continue selling remaining oil stocks at these stations until depleted.
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