Cambodia’s ban on refined oil imports from Thailand is unlikely to significantly impact Thai oil companies, as they can adjust their sales strategies by redirecting products to other Asian markets, according to the Department of Energy Business (DOEB).
Thailand exports nearly 6 million liters of oil daily to Cambodia, a volume that can be redistributed to countries like Singapore, explained Sarawut Kaewtathip, the director-general of DOEB.
Thailand operates six oil refineries, including three under PTT Group (Thai Oil, IRPC, and PTT Global Chemical), two under Bangchak Group (Bangchak Corporation and Bangchak Sriracha), and Star Petroleum Refining as the sixth. These refineries collectively produce about 160 million liters of refined oil daily, with approximately 130-135 million liters consumed domestically.
“There should be no issue if the surplus is sold to other countries,” Sarawut stated.
Cambodian Prime Minister Hun Manet announced that oil imports from Thailand would be suspended effective after midnight on June 22, in response to ongoing border disputes between the two countries. Cambodia imports around 10 million liters of oil daily on average.
Thailand was the primary supplier of refined oil to Cambodia prior to the ban, mainly because of its lower market prices, a Thai Energy Ministry official, who wished to remain unnamed, revealed. The cost of shipping refined oil from Thailand to Cambodia is about one baht per liter cheaper than from Singapore, and also less expensive than shipments from Malaysia and Vietnam. Cambodia has indicated plans to increase purchases from Malaysia and Vietnam.
Many Thai oil refineries are situated in the Eastern Economic Corridor, which is geographically close to Cambodia.
“The oil ban means Cambodia will miss out on the advantage of low shipping costs,” the official added.
For Thai oil companies, if exports to Cambodia decline, they can reduce production capacity and shift focus to major maintenance for idle facilities, the official noted.
Last year, Thailand exported 2.29 billion liters of oil to Cambodia, accounting for 21.1% of the country’s total fuel exports, according to the Energy Ministry.
Meanwhile, PTT Oil and Retail Business, a subsidiary of PTT Group listed on the SET, stated that Cambodia’s ban on energy imports from Thailand would not severely affect its operations, which include 186 petrol stations across Cambodia. The company plans to continue selling the remaining stock at these stations until it is fully sold out.