PTT Plc, Thailand’s state-owned oil and gas conglomerate, anticipates a stronger business outlook in 2024, buoyed by increased energy demand and an improving domestic economy, despite a forecasted dip in energy prices.
The high tourism season is expected to drive up domestic oil consumption as both foreign and local travellers contribute to heightened energy usage. Factories are also projected to ramp up production to meet increased demand during year-end festivities, said Tanapon Prapapan, vice president for investor relations at PTT.
While oil and gas prices are predicted to decline, higher energy demand stemming from greater travel and business activity should help offset the impact. Dubai crude oil prices are forecast to average between US$70 to US$80 per barrel next year, with liquefied natural gas prices in the US market estimated to range from US$2.5 to US$3.5 per million British thermal units.
PTT expects a drop in its gross refinery margin (GRM) due to reduced prices for petrochemical products and lower capacity utilization in its refinery and petrochemical operations. GRM, a measure of profitability in the oil refinery and petrochemical industries, is expected to decline amidst an oversupply of petrochemicals that has softened market demand.
Ethylene and propylene prices are forecast to fall by 1 to 2% next year, averaging below US$1,000 per tonne, while paraxylene and benzene prices are projected to decrease by 4 to 6%, also averaging below US$1,000 per tonne.
Despite these challenges, PTT projects its revenue in 2024 to remain consistent with the 3.1 trillion baht (US$90 billion) achieved in 2023, reported Bangkok Post.
“The Thai economy is likely to improve next year, supported by government spending and new stimulus measures,” said Tanapon.
In related news, efforts by the Thailand government to cap energy prices, and diesel subsidies may appease the public in the short term, but there are growing concerns about the long-term implications on fuel consumption.
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