With the majority of air fleets grounded, and commuters and motorists locked down, oil demand has hit rock bottom due to the Covid-19 pandemic.
Among the ASEAN countries that has witnessed rising new coronavirus cases in the recent months, Thailand has imposed an emergency decree that has disrupted its economic activities and restricted movement of the public . Currently, with cases tapering off, the country readies to ease down the lockdowns. A welcome relief for most of its industries but the oil sector continues to reel from their impact.
The demand for aviation fuel has reportedly dropped by 90%; same goes for diesel orders which have seen signifant decline. Furthermore, a total 10 billion baht has been chopped off the value of oils from six refineries in the first quarter of the year.
As a remedy, state-owned oil and gas group PTT, including its oil refinery companies PTT Global Chemical (PTTGC), IRPC and Thai Oil, which collectively account for 62% of the total refinery output in the country is trimming down overall petroleum refinery capacity by 15-25% next month.
Reports quoted PTT president Chansin Treenuchagron commenting that the negative impact of the global lockdown may last until end of the second quarter.
For PTT, it is also mulling deferring its capital expenditure for an olefins cracker production plant in the US for its Thailand petrochemicals arm, PTTGC, which requires 200 billion baht over five years. The olefin cracker, which is expected to churn out an annual capacity of 1.5 million tonnes, will be sited in Belmont County, Ohio.