Bangchak disputes need for extra oil reserves
Bangchak Petroleum believes the Energy Ministry's plan to extend the statutory oil-reserve from 60 days of consumption to 90 days to deal with a possible energy crisis, and the development of a law to enforce this, would unnecessarily burden the public.
Bangchak president Anusorn Sangnimnuan said the extension would require the government to establish additional oil inventory tanks, which would incur loan costs.
Only private refineries have oil depots at present. They are required to strategically reserve enough oil to last for 60 days. But the Energy Ministry plans to ask the government to set up its own depots to reserve oil to last for 30 days in order to boost the nation’s strategic reserves.
Anusorn said if the government wants to strategically reserve oil to last for 30 days on its own, it would have to build depots that could store 24 million barrels of oil. This would require investment of almost Bt100 billion. He feared the burden would ultimately be passed to the public.
He said he personally believed Thailand could buy enough crude oil for refining in the event of a crisis and that it wasn’t necessary to extend the reserves. He felt extending the amount by just five or six days worth of oil would be sufficient.
Recently, Kurujit Nakornthap, deputy permanent secretary at the Energy Ministry, said the ministry was about to hire a consultant to study the possibility of setting up a strategic oil reserve fund to deal with a possible energy crisis. Many developed countries use a fund to deal with the threat of an oil crisis – to buy oil for national reserves.
A ministry source said the cost of hiring a consultant was expected to be Bt30 million.
The ministry would also draw up a new law to govern this way of boosting oil reserves, as oversight is still managed via an emergency decree from 1973 on remedying and preventing a fuel shortage, as it felt current laws may not be enough to solve an oil shortage problem.
But the source noted that the decree was sufficient to cope with the problems as it authorises the prime minister to execute orders to deal with such situations.
The source said developing a new law would require several time-consuming processes, which meant there may not be time to solve problems in the near term.
As part of plans to deal with a fuel crisis, the Energy Ministry is preparing for possible temporary closure of the strategic Strait of Hormuz in the Middle East. It is confident it would be able to handle such an eventuality after developing an emergency plan with a number of key organisations.
Recently, the Permanent Secretary’s Office of Planning and Strategy held an emergency one-day exercise simulating events that could occur in the event of such a closure.
