National oil and gas conglomerate PTT Plc is optimistic about improved business performance in the second half of 2024, driven by an upward trend in the Thai economy and a rise in energy demand typically seen during year-end festivals and the tourism season.
As travel increases and foreign tourist arrivals are expected to rise, factories will also ramp up production to meet the demand for goods, noted Tanapon Prapapan, vice-president for investor relations at PTT.
Additional factors supporting economic growth in the latter part of 2024 include the government’s ongoing initiatives to accelerate budget spending.
The Bank of Thailand’s Monetary Policy Committee (MPC) predicts continued growth in Thai GDP during the second half of this year, estimating approximately 3% growth in the third quarter and 4% in the fourth quarter.
On August 19, the National Economic and Social Development Council reported GDP growth of 2.3% for the second quarter of 2024, aligning with the MPC’s projections.
Mr. Tanapon indicated that PTT’s oil refinery business experienced a 24% decline in the gross refinery margin (GRM), dropping to US$4.7-5.7 per barrel, due to increased production capacity for diesel and gasoline.
The GRM, which reflects the difference between crude oil prices and refined oil prices, represents the costs incurred during the refining process.
He anticipates a surge in demand for diesel and gasoline in the US and Europe during the upcoming tourism season, which could mitigate the impact of PTT’s surplus of refined oil.
In the petrochemical sector, Mr. Tanapon mentioned that PTT’s sales of petrochemical products are expected to remain weak due to increasing supply in the global market.
PTT has previously stated that it intends to reassess its oil and non-oil operations, including its electric vehicle (EV) initiatives, to better align with the changing economic landscape and rising competition.
While the company’s life science ventures remain robust, PTT has yet to finalize its strategy regarding car assembly, battery manufacturing, and its role as a sales agent for the Chinese EV manufacturer Xpeng, based in Guangzhou.