Benzene May Hit 45 Baht Per Liter & Diesel Could Hit 38 Baht Per Liter In The Next Few Days

[Theyreallrubbish]

Relative to the price of crude oil and benzene/gasoline: I do not know how the oil companies price their inventories for accounting purposes (I flunked cost accounting, twice!), but I can guess how their marketing dept. decides on the price they pass on to their customers.

I don't know about Thailand or the US but in many EU countries the local taxmen are the ones who take most of the pie...per liter.

That doesn't mean the oil companies don't make money though.

LaoPo

Yes, indeed, the tax man gets his share, which is usually based upon the volume sold at the pump at the station, so many cents per liter or gallon. My question is about the price of oil to an oil company, for a barrel of crude that goes to the refinery. LIFO (using a weighted average of the cost of new crude, whether bought on mid-term contract or off the latest spot market) makes sense - to charge according to the cost of the latest thousand barrels that oil company paid for the crude oil.

I see. (in my country tax is not based on volume, just fixed tax/liter).

Do you think that answer can be given by anyone ? I suppose it differs from country to country and company to company. Why, for heaven's sake are gasoline/gas prices in the various parts of the world so different in price...?

Is it just taxes ? Why does an American driver pay less than half for his gas than his fellow driver in the EU or elsewhere ? One would think that the EU is closer to the Middle East than the US (transport costs).

LaoPo

Most oil imported into the US is actually pulled out of the ground in the same hemisphere. Less than 5% of the oil actually comes from the Middle East. So transport costs are not the issue.

The big issue is tax and it pretty much explains the differences in prices between different countries with some variation dependent on the level of competition in the market, refinery capacity and overall costs of doing business (more expensive to operate a gas station in London than in Chiang mai.)

[LaoPo]

Most oil imported into the US is actually pulled out of the ground in the same hemisphere. Less than 5% of the oil actually comes from the Middle East. So transport costs are not the issue.

The big issue is tax and it pretty much explains the differences in prices between different countries with some variation dependent on the level of competition in the market, refinery capacity and overall costs of doing business (more expensive to operate a gas station in London than in Chiang mai.)

I'm not so sure about that:

http://tonto.eia.doe.gov/dnav/pet/pet_move...m0_mbblpd_a.htm

About taxes: it still doesn't explain the huge difference between US and EU gas prices; I don't think it's just the taxes, but...hey..who am I, since it's a very complicated issue and the oil companies AND governments like to keep it that way...

PS: interesting oil link US:

http://www.eia.doe.gov/neic/quickfacts/quickoil.html

LaoPo

Edited May 5, 2008 by LaoPo

[Plus]

SJ, if your Landrover is really that old, you can safely install the most basic LPG system for about 18k and it will cut your fuel costs at least in half.

I prefer to think of "Tank" as "young" and yes, he really is that young....

That's a very intriguing idea about converting to LPG... I'll investigate it on the Land Rover forums to see if others have done it and their results. I hadn't realized converting was that inexpensive so thanks for the tip.

http://www.thaivisa.com/forum/index.php?sh...t&p=1681944

[jumnien]

Sadly, the cost of petrol seems stuck at around 35 baht/liter where it does little to relieve traffic congestion or global warming. Perhaps, with Buddha's help, we'll see 70 baht/liter before long! We can only hope!

[Plus]

Sunrise, as I said earlier, price difference between using public transport and driving your own car is too insignificant to make any effect.

[Heng]

I felt traffic was a little lighter when I was out today, from about noon until 4pm. But yeah, some of the places I went were jam packed with cars. Plenty of folks still don't have any problem affording gas, but I think some of the getting out on the road just to run one errand or just to go out crowd might be thinning out.

[Theyreallrubbish]

Most oil imported into the US is actually pulled out of the ground in the same hemisphere. Less than 5% of the oil actually comes from the Middle East. So transport costs are not the issue.

The big issue is tax and it pretty much explains the differences in prices between different countries with some variation dependent on the level of competition in the market, refinery capacity and overall costs of doing business (more expensive to operate a gas station in London than in Chiang mai.)

I'm not so sure about that:

http://tonto.eia.doe.gov/dnav/pet/pet_move...m0_mbblpd_a.htm

About taxes: it still doesn't explain the huge difference between US and EU gas prices; I don't think it's just the taxes, but...hey..who am I, since it's a very complicated issue and the oil companies AND governments like to keep it that way...

PS: interesting oil link US:

http://www.eia.doe.gov/neic/quickfacts/quickoil.html

LaoPo

Thanks for the links, so its about 15% from the Persian Gulf.

From another link it shows that Thailand is the world's 14th largest importer of oil. Not a good portend for the near term future of the Thai economy as its oil import needs are large compared to the size of its economy so its going to be hit hard by the rise in the oil price.

Lets hope that the agricultural boom earns enough money to pay for all that oil

[Theyreallrubbish]

I felt traffic was a little lighter when I was out today, from about noon until 4pm. But yeah, some of the places I went were jam packed with cars. Plenty of folks still don't have any problem affording gas, but I think some of the getting out on the road just to run one errand or just to go out crowd might be thinning out.

I was out driving in the country a few days ago and those of you who have done this will have seen the 6 p.m. migration where it seems the half the entire population gets on their motorbikes and visits the other half and it struck me that these people have little disposable income anyway and the rise in oil price may put an end to a social tradition that's been going for a while, or at least narrow it to walking distance again as it probably was prior to cheap motorbikes and gasoline

[PeaceBlondie]

I was clumsily referring to taxes by volume, so much per liter.

Americans complain about the taxes on gasoline (it is prominently displayed on the pump, in Texas), but Europeans pay far higher gasoline taxes (each state of the USA has a different tax rate).

The basic underlying cost is for a barrel of oil, such as the current value over US$100. Sometimes we hear the argument that oil is bought on long-term contracts that date way back ten years or so, but I doubt that is still the case. And accounting-wise or marketing-wise, I can see that the price should be computed at replacement cost to the inventory. That should be a known technique.

[LaoPo]

For what it's worth:

Insights into (US, LP) Spring 2008 Gasoline Prices

"Changes in wholesale gasoline prices relative to crude oil are determined by the tightness between gasoline supply (production and net imports) and demand. Expectations for U.S. gasoline supply relative to demand are for a more favorable situation in January through May 2008 than was the case in the comparable 2007 period. Demand growth, which varies seasonally and depends on economic factors, is expected to slow. New gasoline supply is affected by refinery outages, refinery run decisions, and import variations. Planned refinery outages for January through May 2008 are lower than for the same period in 2007. Given lower planned outages and assuming the return of unplanned outages to more typical levels, including the return of BP's Texas City refinery to full operation, gasoline production could increase between 100 and 200 thousand barrels per day over last year's level, depending on the market incentives. In addition, ethanol use, which adds to gasoline supply, is expected to continue to increase. Considering the uncertainty in all the gasoline supply components, there is little likelihood of events combining in 2008 to lead to the kind of tight supply downstream from crude oil markets seen in spring 2007. In summary, refinery outage and import impacts should contribute less to gasoline price increases in 2008 than in 2007. If all of the low-range estimates for supply occurred, total gasoline supply would increase about 200 thousand barrels per day (Figure S1). However, record crude oil prices are nonetheless pushing current and expected gasoline prices to record levels."

http://www.eia.doe.gov/pub/oil_gas/petrole...gmogas2008.html

LaoPo

[cclub75]

From another link it shows that Thailand is the world's 14th largest importer of oil. Not a good portend for the near term future of the Thai economy as its oil import needs are large compared to the size of its economy so its going to be hit hard by the rise in the oil price.

Lets hope that the agricultural boom earns enough money to pay for all that oil

Unfortunatly... no.

Total value of energy imports (crude, gas, coal, etc.) (source EPPO)

2007 = 874 billions THB

2006 = 919 billions THB

Total value of agricultural + fishery exports (source BOT)

2007 = 493 billions THB

2006 = 474 billions THB

There is no escape.

Thailand has a very high oil Intensity (amount of oil required to produce a unit of economic output). Like in China (source UNDP report)

No need to be Einstein to understand that Thailand (and most of asian countries) are and will suffer a lot from energy prices, compare to western countries.

-because of higher oil intensity

-and because their population is much poorer (it means, proportionally, any hike have much greater impact)

It's a very dangerous cisor effect.

The optimistic people think that everything will be okay, and that energy efficiency will increase in Asia. Sure. But on the long term.

It's impossible to imagine Thailand switching in a few years to a services economy, increasing a lot its energy efficiency, or switching to nuclear and solar energy, or increasing the purchasing power of all of its population. Day dreaming.

Therefore, it's not gloom and doom... just the harsh reality : we are on a bumpy road.

Edited May 6, 2008 by cclub75

[sriracha john]

Oil price may top 45 baht/liter in next few days

Energy specialist Manoon Siriwan admits that the retail prices of benzene may top 45 baht per liter while the retail diesel price could hit 38 baht per liter in the next few days, if the price of global crude oil reaches 125 US dollars per barrel.

Mr. Manoon says in the next few months, the price of crude oil in the United States of America is likely to hit 150 US dollars per barrel, further speculating that it may reach 120 US dollars per barrel soon.

$120 reached... and climbing...

Oil hits record $120.93 on fear of tight supply

Oil futures rose to an all-time high near $121 a barrel Tuesday with new concerns about a threat to supply and a weaker dollar.

The surge in oil prices was also fueled by hopes that the U.S. economy will be spared a sharp downturn after the release of data Monday showing an unexpected expansion in the U.S. service sector in April, analysts said.

Light, sweet crude for June delivery rose to a record $120.93 a barrel in electronic trading on the New York Mercantile Exchange on Tuesday.

- Associated Press (today)

Edited May 6, 2008 by sriracha john

[jumnien]

What if the price of oil keeps rising? Do we have less congestion on the roads, cleaner air and positive effects for global warming? This is really a positive turning point for Thailand and the world!

[Fishenough]

What about alternate fuel such as vegie oil ?? Any of that going on?

[KireB]

So some advice for the ordinary Thais: get out of your cars!

Walking, cycling or motorbikes are very comfortable in this climate.

Thais are too much in love with their cars!

[Fishenough]

From another link it shows that Thailand is the world's 14th largest importer of oil. Not a good portend for the near term future of the Thai economy as its oil import needs are large compared to the size of its economy so its going to be hit hard by the rise in the oil price.

Lets hope that the agricultural boom earns enough money to pay for all that oil

Unfortunatly... no.

Total value of energy imports (crude, gas, coal, etc.) (source EPPO)

2007 = 874 billions THB

2006 = 919 billions THB

Total value of agricultural + fishery exports (source BOT)

2007 = 493 billions THB

2006 = 474 billions THB

There is no escape.

Thailand has a very high oil Intensity (amount of oil required to produce a unit of economic output). Like in China (source UNDP report)

No need to be Einstein to understand that Thailand (and most of asian countries) are and will suffer a lot from energy prices, compare to western countries.

-because of higher oil intensity

-and because their population is much poorer (it means, proportionally, any hike have much greater impact)

It's a very dangerous cisor effect.

The optimistic people think that everything will be okay, and that energy efficiency will increase in Asia. Sure. But on the long term.

It's impossible to imagine Thailand switching in a few years to a services economy, increasing a lot its energy efficiency, or switching to nuclear and solar energy, or increasing the purchasing power of all of its population. Day dreaming.

Therefore, it's not gloom and doom... just the harsh reality : we are on a bumpy road.

I see...what about wvo (waste vegie oil) processing used oil into fuel?

[sriracha john]

KHAO SOD EDITORIAL :

With the price of oil still rising steadily, the government must come up with a workable plan to reduce energy consumption and rely more on alternative energy sources. The high price of oil affects all sectors of the economy, including manufacturing, transportation, food and services. Consumers have been hard hit by soaring food prices since the beginning of the year, despite the Commerce Ministry's pledge to deal with the problem. Last year, Thailand imported about 900 billion baht worth of energy and 90% of it was oil. The Energy Ministry has set a target to reduce energy consumption by 20% in 2011.

Continued here:

http://www.bangkokpost.com/News/07May2008_news99.php

[sriracha john]

Energy Ministry closely monitors oil price situation

Energy Minister Poonpirom Liptapanlop said the ministry closely monitors the oil price situation to find measures to prevent effects on people.

The minister said further that the global oil price has been fluctuating and it is likely to reach US$150 a barrel.

She says the ministry has therefore proactively promoted long-term energy-saving measures and launched short-term measures to assist the transport sector, such as the promotion of compressed natural gas (CNG) among taxi drivers.

According to the minister, there are 20,000 taxi drivers using CNG and 50,000 are waiting to adjust their engines to be compatible with the natural gas.

Mrs Poonpirom says the ministry has approved budget for PTT Plc. to set up gas stations to distribute CNG.

- ThaiNews (today)

[soundman]

Fuel up another 50 Satang per litre across the board at PTT stations from 5am tomorrow.

[PeaceBlondie]

KHAO SOD EDITORIAL :The Energy Ministry has set a target to reduce energy consumption by 20% in 2011.

Continued here:

http://www.bangkokpost.com/News/07May2008_news99.php

There is a good example of the wishful thinking or daydreaming that cclub75 just commented about. Thailand will not reduce its energy consumption even 10% by 2012, except by the crisis that results from greatly increased prices. The biofuels, solar energy, additional insulation, nuclear options, etc., are a decade away.

[soundman]

KHAO SOD EDITORIAL :The Energy Ministry has set a target to reduce energy consumption by 20% in 2011.

Continued here:

http://www.bangkokpost.com/News/07May2008_news99.php

There is a good example of the wishful thinking or daydreaming that cclub75 just commented about. Thailand will not reduce its energy consumption even 10% by 2012, except by the crisis that results from greatly increased prices. The biofuels, solar energy, additional insulation, nuclear options, etc., are a decade away.

I would really love to see the proposed strategy for implementing that target.

Crackdown on residential consumption on odd & even days?

Those with the role off propaganda statements have no idea.

[cclub75]

I felt traffic was a little lighter when I was out today, from about noon until 4pm. But yeah, some of the places I went were jam packed with cars. Plenty of folks still don't have any problem affording gas, but I think some of the getting out on the road just to run one errand or just to go out crowd might be thinning out.

I believe that anyone living in BKK, using cars everyday, could share your views.

This "discrepancy" has an echo in hard datas.

-the total mogas + diesel consumption in Thailand do not evolve a lot. It's flat, or going down a little bit (source EPPO)

2004 = 495 000 barrels per day

2005 = 501 000

2006 = 477 000

2007 = 486 000

-on the other hand, we have in average 55 000 new cars SOLD EVERY MONTH in the country (passengers car + commercial cars, source BOT here and there)

For the whole 2007 year = 631 000 new vehicles !

Now we have to factor in (or out):

-people who switch to NGV/LPG (I'm too lazzy to look at the figures)

-people who have more purchasing power (their income increase, so they can endure prices hikes)

-the fact that new cars have a better gasoline efficiency

-the fact that people keep their car long time... very long time. I can't believe that the 631 000 cars of 2007 were bought only by people seeking a new car, or a second car.

So what to think about those tidbits ? I think (but difficult to proove it) that the average thai driver... is driving less !

And bingo, that could explain what we see on the "ground".

-there are apparently no rules for the traffic in BKK : the same day of the week, at the same hour, on the same way, you can see light trafic or heavy trafic, depending on the week. Monday can be heavy, or light, and then tuesday different etc. It's apparently a total chaos.

But I remember people talking about a golden rule : "don't go out the first friday and saturday of the month"... because people get their salary, and they all go out, to have dinner etc. It's easy, after a few months, to see that this rule is true indeed.

So I think we start to see the same behaviour with driving : some people use their cars a few days per month.

That goes against our natural western bias : normally if you use a car to go to work for instance, you use it every day, right ? But here, I really think that it's different.

Car remain a very strong status sign... So I think we will continue to see the car market growing, eventhough the price of gasoline is going up (and will probably continue to do so).

[tropo]

Energy expert says retail benzene price may reach 40 baht a liter

Energy Expert Manoon Siriwan (มนูญ ศิริวรรณ) says the price of Benzene may hit record high of 4 USD a gallon, resulting in the retail Benzene price in the country in June to increase to 40 baht a liter.

The expert says further that the crude oil price in the global market might exceed 120 USD a barrel and this increase will affect prices of refined oil in the Singapore market. Factors affected oil price hikes include continuously depreciating USD and terrorist attacks at oil pipes in Nigeria which leads to less oil export from the country.

Mr Manoon also says the retail diesel price has increased 2-3 times lately due to low oil margins. He adds that if the global diesel price is raised 2-3 more times, the domestic diesel price will increase by two baht to stay at 38 baht a liter.

Source: Thai National News Bureau Public Relations Department - 23 April 2008

This prediction is looking pretty good. '95' was 36.65 baht/liter yesterday.

[bannork]

The school holidays truly make a difference to the number of cars on the road in Bangkok, wait till after May 16 to see if traffic has really thinned,(hopefully).

[Plus]

The school holidays truly make a difference to the number of cars on the road in Bangkok, wait till after May 16 to see if traffic has really thinned,(hopefully).

Thinned?

Usually the start of the school year is a total nightmare with parents driving extra kilometers to drop their precious. Half the time they don't remember the way and crawl at the pedestrian speed looking for their schools or parking places. On the first day they all feel the need to park and walk with their little brats all the way to the classroom door.

Expect morning traffic to double for a week or two, it would also be unpredictable. Tthan it would even out and stabilise on much higher level than during school holidays.

[Heng]

Yeah, I think that was bannork's point. Traffic "should" increase (as usual), but if it does not -or seems significantly thinner-, some might say that the higher fuel prices might be the cause.

[PeaceBlondie]

Energy expert says retail benzene price may reach 40 baht a liter

This prediction is looking pretty good. '95' was 36.65 baht/liter yesterday.

91 benzene is 36.74 baht on 8 May. Still two weeks after the prediction of "the next few days" and quite a way from 45 baht, but on its way, even though oil hit $123 per barrel.

[Plus]

Yeah, I think that was bannork's point. Traffic "should" increase (as usual), but if it does not -or seems significantly thinner-, some might say that the higher fuel prices might be the cause.

Two days ago I showed my two little brats how to take the bus. It was 27 baht for three of us for a on kilometer trip, non-aricon. Driving is a lot cheaper, about 3 baht in a cool comfort of a private car.

People won't jump on buses to save money - it's an illusion.

[Thai at Heart]

From another link it shows that Thailand is the world's 14th largest importer of oil. Not a good portend for the near term future of the Thai economy as its oil import needs are large compared to the size of its economy so its going to be hit hard by the rise in the oil price.

Lets hope that the agricultural boom earns enough money to pay for all that oil

Unfortunatly... no.

Total value of energy imports (crude, gas, coal, etc.) (source EPPO)

2007 = 874 billions THB

2006 = 919 billions THB

Total value of agricultural + fishery exports (source BOT)

2007 = 493 billions THB

2006 = 474 billions THB

There is no escape.

Thailand has a very high oil Intensity (amount of oil required to produce a unit of economic output). Like in China (source UNDP report)

No need to be Einstein to understand that Thailand (and most of asian countries) are and will suffer a lot from energy prices, compare to western countries.

-because of higher oil intensity

-and because their population is much poorer (it means, proportionally, any hike have much greater impact)

It's a very dangerous cisor effect.

The optimistic people think that everything will be okay, and that energy efficiency will increase in Asia. Sure. But on the long term.

It's impossible to imagine Thailand switching in a few years to a services economy, increasing a lot its energy efficiency, or switching to nuclear and solar energy, or increasing the purchasing power of all of its population. Day dreaming.

Therefore, it's not gloom and doom... just the harsh reality : we are on a bumpy road.

I see...what about wvo (waste vegie oil) processing used oil into fuel?

And those numbers would be an awful lot worse if the baht hadn't strengthened.

[sriracha john]

Energy expert says retail benzene price may reach 40 baht a liter

This prediction is looking pretty good. '95' was 36.65 baht/liter yesterday.

91 benzene is 36.74 baht on 8 May. on its way, even though oil hit $123 per barrel.

that was yesterday and now it's....

Oil surpasses $125 per barrel

Oil prices surged past $125 per barrel Friday on the eve of the U.S. driving season as a weakening U.S. dollar drove investors to snap up commodities.

Light, sweet crude for June delivery rose as high as $125.12 a barrel.

- Associated Press (today)