Bangkok: Analysts are expressing concerns about the long-term implications of a proposed reduction in refining margins, despite the positive news of Moody's upgrading Thailand's credit rating outlook.

According to Thai News Agency, the recent announcement by Moody's Ratings, upgrading Thailand's credit rating outlook from "Negative" to "Stable" while maintaining a Baa1 rating, has been met with mixed reactions from financial experts.

Mr. Suwat Sinsadok, Managing Director of Globlex Securities, highlighted the positive impact of the upgrade on Thailand, forecasting an upward or sideways movement in the Thai stock market. He noted that the stable political situation and resolution of trade tariff issues with the United States are contributing to a favorable economic outlook, even though the economy remains somewhat fragile due to ongoing global conflicts.

While concerns about potential surges in oil prices due to Middle East tensions were noted, Mr. Suwat reassured that current fluctuations keep prices below $100 per barrel. He emphasized that the indefinite delay of US President Donald Trump's decision to attack Iran has mitigated immediate risks to oil prices. The upgrade in Thailand's credit rating is viewed as beneficial, especially as the government considers borrowing more and potentially increasing the public debt ceiling.

Mr. Suwat also addressed the concern over refining margins, emphasizing the risks of government intervention. He argued that such policies could have detrimental effects on the refinery industry, which thrives on stable and predictable conditions. The potential reduction of refining margins by the Energy Policy Administration Committee could lead to long-term instability and hinder refinery development, thereby impacting Thailand's energy security.

He highlighted the cyclical nature of the refining industry, which has adapted to survive past financial losses. According to Mr. Suwat, government intervention disrupts market dynamics and discourages investment in infrastructure and facilities, ultimately undermining the industry's growth potential.

The debate continues as stakeholders weigh the benefits of immediate public gains against the risk of long-term economic consequences, urging careful consideration of the broader impact on Thailand's energy sector and economic stability.