Bangkok: The Energy Policy and Planning Office (EPPO) has clarified the misconception surrounding the term "refining margin," emphasizing that it should not be mistaken for the "net profit of the refinery." This clarification comes at a time when the conflict in the Middle East has led to significant volatility and an upward trend in global oil and natural gas prices, which directly impacts Thailand with increased energy costs.

According to Thai News Agency, the issue of Gross Refining Margin (GRM) has resurfaced due to reports indicating a rise to 13.91 baht per liter from an average of 2 baht per liter in February. This rise in the refining margin has, in turn, driven up domestic retail fuel prices. The EPPO, through its Facebook page, explained that the GRM represents the difference between the average value of the finished product from the oil refining process and the average cost of reference crude oil. It serves as a reflection of the price difference over a specific period and excludes various refinery expenses such as crude premium, transportation and shipping costs, insurance, fuel, electricity, water, maintenance, labor, interest, and taxes.

The EPPO further explained that the "refining margin" is not synonymous with the "net profit of the refinery" as it can fluctuate based on the global oil market situation. This is particularly evident during periods of geopolitical tension or war, which can lead to sudden increases in transportation costs, insurance, and related expenses.