Bangkok: Negative oil refining margins reveal that even jobbers receive subsidies from the oil fund. The situation regarding fuel sales at gas stations remains critical. Gas stations are still limiting sales, and people are panicking and stockpiling fuel. The Oil Fund explained that it subsidizes jobber prices from the refinery level, expressing confusion as to why fuel is being sold at higher prices. Recently, refineries have begun to suffer from negative refining margins, a stark contrast to the high margins they experienced at the beginning of the conflict, which drew criticism.
According to Thai News Agency, the volatile oil price war has led to criticism of refineries profiting from soaring refining margins. The situation reversed rapidly, with refining margins quickly turning negative. The Economist Times reported on March 18, 2026, that Singapore's core refining margin had fallen to around -$5 to -$10 per barrel. This represents a rapid decline from its high of -$40-$45 per barrel in early March.
Although refined oil prices are high, the landed cost of importing crude oil has increased even more due to the impact of the conflict in Iran, which has caused freight rates and insurance costs to skyrocket by over 800%. This cost is typically not included in the headline margins used for refining.
Meanwhile, Singapore oil prices closed at very high levels on March 20, 2026 (crude oil). Dubai crude settled at $158.85, ULG95 at $163.93, Naphtha at $133.98, and HSD at $222.02.
Asian refineries initially benefited in the short term from panic buying amid challenges from crude oil supply constraints, production cuts, and widening market imbalances. However, analysts believe that current market conditions are making it more difficult for refineries to maintain positive refining margins in the near future.
Oil demand is weakening as Asian demand shows signs of slowing down due to high energy prices and supply uncertainty. Reduced aviation activity, slower industrial fuel use, and energy conservation measures implemented in many countries are putting pressure on product crack price spreads and accelerating the decline in refining margins.
Regarding the situation at gas stations today, there are still long queues to fill up with fuel, and people are using jerrycans to refill. Gas stations are still limiting the amount of diesel fuel they can dispense. Sales have almost doubled some days, resulting in each gas station having already sold out of their original quotas allocated by the parent company. Therefore, sales are now being averaged to ensure wider distribution nationwide. When demand exceeds the allocated amount, fuel runs out, forcing gas stations to close earlier than usual.
Regarding the issue of jobbers, intermediaries in the fuel pricing under Section 10, selling diesel at prices approximately 10 baht/liter higher than the pump price, the Fuel Fund Office (FFO) clarified that this group receives compensation from the Fuel Fund, similar to traders under Section 7, through the refinery mechanism. However, issues of selling at inflated prices and taking advantage of consumers fall under the purview of the Ministry of Commerce and the Ministry of Interior.
Regarding the price of green fuel, or major fishing fuel, the price on March 22nd was 40.80 baht. Within one month, it has increased by 119.35%.
Mr. Prasert Sinsukprasert, Permanent Secretary of the Ministry of Energy, stated that the ministry is currently conducting an in-depth investigation into the exact location of the smuggled oil. He noted that PTT's refineries are operating 24 hours a day, refining at over 109% capacity, and the government has a plan to allow jobbers to purchase oil at the refinery gate at the same price as gas stations. This aims to reduce the burden and prevent competition for oil at gas stations.
However, the selling price is subject to negotiation. This group does not have the burden of a 1% oil reserve like under Section 7 and does not invest in oil additives. The customer base is also subject to negotiation and includes independent gas stations, industry, and transportation.
It is also worth noting that the increased demand is due not only to users bringing their own gallons to refill because they fear price increases and shortages but also because groups using smuggled fuel from other countries have shifted to using more domestically produced fuel. This resulted in average diesel sales in March reaching around 84 million liters per day, with some days reaching as high as 118 million liters per day.
However, due to Thailand's gradual price adjustments and the implementation of stricter measures to prevent oil hoarding, the situation is expected to ease.