Someone Gained Bt6bn When Fuel Price Hiked

[george]

PM orders probe on fuel hoarding allegation

BANGKOK: -- Prime Minister Thaksin Shinawatra this morning instructed the Energy Ministry to look into an allegation by a social crusader that someone gained more than 6 billion baht immediately after the government announced the diesel price hike on Tuesday.

Senator Sophon Supapong, who is former president of Bangchak Petroleum Plc, was in a limelight yesterday when he came out and raised the accusation that the outright increase in the diesel price by 3 baht per liter had made someone gain benefits of more than 6 billion baht instantly.

The premier said Energy Minister Viset Choopiban, who is a veteran in the oil business, had been told to examine whether the allegation was justified.

“The figure unveiled is something that I never imagine. So, I could not give any comment. However, the investigatin into the matter must be made and the energy ministry has been asked to do that.”

Asked whether the inspection of oil stocks was raised for discussion at the meeting on the diesel price hike, he said, it was a duty of officials concerned to do that regularly.

Still, should there be an exploitation of the oil stock inspection, legal actions would be taken against those involved.

“If Khun Sophon has evidence to justify the allegation, he should submit information to us in a confidential manner so he would not be sued later.

“Should the matter prove to be true, it will greatly benefit us. So, I want him to give the government a tip-off. I will take care of the matter if there is enough evidence. Whoever hoards fuel for speculation must be punished,” said Mr. Thaksin.

--TNA 2005-03-24

[Erwin1011]

Somebody missed an opportunity here and consequently slightly pi$$ed off

[The_Moog]

Whoever hoards fuel for speculation must be punished,” said Mr. Thaksin.

Why, is it illegal to store fuel in advance of a price rise? (assuming you aren't a Government Insider)

Airlines manage their fuel book - buying forward contracts when prices are trending lower.

First time i've ever heard this Law. is Thaksin talking out of his bottom again?

Sounds like another one of these silly political ballyhoos where people talk in cryptic clues or give initials - then nothing happens.

[grahamb]

Seeing as they've been talking about raising the price for weeks, I assume it wouldn't have been too difficult for someone to hoard the diesel. I agree with The_Moog though: is this illegal behaviour or just anticipating future changes in the market?

[AndyW]

I think the illegality lies in the fact they've received a govt subsidy to keep the price low, then save the fuel to sell at the higher price. Hoarding to anticpate a market adjustment isn't the same as waiting for the subsidy to be lifted & then cashing in on the new price & pocketing the subsidy.

[ovenman]

It's not like anybody can hoard a lifetime's supply of fuel either. I got the impression from the story in today's Bangkok Post that an actual legitimate gripe the government may have is that the subsidy had already been paid on the diesel fuel being hoarded. Even so, with these geniuses telegraphing that the price was going up, combined with giving punters all day Tuesday to stock up, what did they honestly expect was going to happen...?

[ovenman]

I think the illegality lies in the fact they've received a govt subsidy to keep the price low,  then save the fuel to sell at the higher price.

You beat me to it!

[The_Moog]

I think the illegality lies in the fact they've received a govt subsidy to keep the price low, then save the fuel to sell at the higher price. Hoarding to anticpate a market adjustment isn't the same as waiting for the subsidy to be lifted & then cashing in on the new price & pocketing the subsidy.

True - if the person in question knew in advance that the subsidy would be eliminated.*

So it all depends on who is the person, (or company)?

(*Though I still can't think what exact statute and law this would breach. Insider Trading Laws of the SEC, - as they pertain to stocks and shares, don't apply to fuel purchases)

[ovenman]

“I will take care of the matter if there is enough evidence. Whoever hoards fuel for speculation must be punished,” said Mr. Thaksin.

Go get 'em, Mr Big!

Watch - if anything comes of this investigation, they'll probably make a scapegoat out of some poor guy from Nakhon Nowhere who operates a petrol station with the old hand-cranked barrel pumps. Meanwhile, some poo-yai TRT crony quietly pockets millions of government-subsidised baht from the millions of litres of diesel he bought at the old price.

[AndyW]

I think the illegality lies in the fact they've received a govt subsidy to keep the price low, then save the fuel to sell at the higher price. Hoarding to anticpate a market adjustment isn't the same as waiting for the subsidy to be lifted & then cashing in on the new price & pocketing the subsidy.

True - if the person in question knew in advance that the subsidy would be eliminated.*

So it all depends on who is the person, (or company)?

(*Though I still can't think what exact statute and law this would breach. Insider Trading Laws of the SEC, - as they pertain to stocks and shares, don't apply to fuel purchases)

<{POST_SNAPBACK}>

they've been talking for months about reducing / scrapping the subsidy after the election

[penzman]

And what exactly was Mr. Moonface doing in Japan a few days before the diesel price hike?

[george]

Update:

Petroleum giant denies Bt6 billion profits from diesel hike

BANGKOK: -- Thailand's largest oil company today reacted angrily to suggestions from senators that it was making profits of Bt6 billion from the latest diesel price rise, claiming that it was in fact making a loss from the move,

As public pressure grew today to accuse oil companies of benefiting from the government's latest Bt3 per litre rise in the price of diesel, Mr. Prasert Boonsamphan, managing director of PTT Plc, said that the allegations made by Bangkok senator Sophon Suphaphong were based on misleading information.

The rush by fuel users to purchase diesel in anticipation of yesterday's price rise had forced the PTT to request the Energy Ministry to approve the sale of some of its fuel reserves in order to ensure that its gas stations did not run out, he said.

As a result, the PTT had been forced to purchase fuel at the new price to make up its reserves, which meant that it had made a loss of Bt171 million

--TNA 2004-03-24

[thaibebop]

So much crap over oil! Make me want to fly the finger to these bigwigs and buy a bike.

[RDN]

.... the PTT had been forced to purchase fuel at the new price to make up its reserves, which meant that it had made a loss of Bt171 million

<{POST_SNAPBACK}>

Yeah right, we believe you.

[ovenman]

.... the PTT had been forced to purchase fuel at the new price to make up its reserves, which meant that it had made a loss of Bt171 million

Yeah right, we believe you.

A great example of creative accounting. What is to say that PTT didn't buy this reserve stock back when diesel was 7 baht/litre and is now making a killing selling it at today's price?