Uproar over oil price rocks PTT Plc

THAI netizens have recently launched a social media campaign against PTT Public Co Ltd, Thailand’s largest energy firm, and the government, blaming them for letting the retail price climb too high, the move which has reportedly caused PTT share price to slide and pressured the government to cap diesel and cooking gas prices.

Some have gone as far as asking the government to transform PTT from a public company into a state enterprise, the move which an expert says is an overreaction.

Many stories on PTT posted on social platforms like Line and Facebook are considered replete with fake information in order to mislead the public to join the campaign and not to fill their cars with petrol at PTT gas stations.

PTT’s executives on Friday came out to clarify the facts and threatened to take legal action against those who accuse PTT of any wrongdoing.

The public have been frustrated over the oil price issue since last month when the government came out to say that oil firms do not need to announce and inform the public one day beforehand that the petrol prices would be adjusted upward or downward.

So for the past month, as the world oil price went up, petrol prices in Thailand had been adjusted upward five times altogether by 2.5 baht per liter, causing anger among general public and the issue has been brought up online.

Oil Platform in California

The issue has then become more or less political as the campaign against PTT and the government has started by comparing petrol prices between Thailand and neighboring countries especially Malaysia, Myanmar and Cambodia where prices are much cheaper.

They have accused the government of allowing PTT to make too much profit and that led to the campaign not to fill their cars with petrol at PTT gas stations.

PTT stock price had gone up, after its par price was split, from 48 baht to almost 60 baht but then dropped significantly last week to 50.25 baht on Monday, causing some worries among stock investors.

Analysts said the drop was not because of the anti-PTT campaign alone but because a foreign broker had adjusted downward the fair price of PTT to 54 baht.

However, with such a campaign moving, the government came out to reverse its order, saying that oil companies have to announce to the public one day beforehand if there is to be petrol price adjustment.

The government last week also decided to use its State Oil Fund to help subsidize diesel price not to exceed 30 baht per liter. The price of cooking gas will be lowered to 363 baht from 395 baht per 15-kilogram tank.

The subsidy from the State Oil Fund will be enough to maintain fuel prices at the current level until the end of the year if consumption is not excessive, said Prime Minister Prayut Chan-o-cha. The State Oil Fund has about 31 billion baht in its coffers.

PTT announced the prices of its petrol have been adjusted down as of this morning, with gasohol 95 retailing at 29.25 baht per liter, gasohol 91 at 28.98 baht a liter, gasohol E20 at 26.74 baht a liter and gasohol E85 at 21.14 baht a liter.

PTT CEO Tevin Vongvanich also said on Monday the social media-organized boycott of PTT petrol would not affect PTT but would hurt the small operators who run 90% of PTT stations.

PTT’s profit would not be affected because petrol made up only 10% of total revenue while about 90% of its 1,500 stations were run by small-scale operators, he added.

“If consumers reject PTT petrol because of poor service or fuel quality, it would be understandable. But if this results from a misunderstanding, then we must explain,” he said.

He denied claims that PTT unfairly sold petrol at higher prices and would lay off staff because of the boycott and may take legal action against those who wrongly accused PTT unfairly.

An expert however predicted that the crude oil price in the next one or two months could stay at around US$50-60 per barrel. In that instance, the government would not need to subsidize diesel price in the domestic market.

Russia and Saudi Arabia said on Friday that they believed a deal was possible to gradually boost oil output from as soon as July, as world oil prices had recently hit highs last seen in 2014.

Meanwhile Russian President Vladimir Putin said on Friday that Moscow would be satisfied if the price of crude oil dropped to $60 per barrel, from the recent around $80.


Top: A PTT Plc petrol pump sign. Photo: Thai News Agency

In-text: An oil platform in the Santa Barbara Channel, California 2. Photo: Ken Lund (CC-BY-SA-2.0)

By Kowit Sanandang