Kasikorn Securities stated that according to the meeting of the Fuel Fund Executive Committee on March 27, 2024, the committee approved adjusting the fund’s rate for diesel fuel to allow retail fuel prices in Thailand to exceed 30 baht per liter, starting from April 2024 onwards.
The firm anticipated the new ceiling price for diesel fuel to be set at 32 baht per liter, up from 30 baht previously.
This announcement was viewed as neutral, as while retail fuel sellers may profit from oil stock inventory gains in the short term, there were risks to the reduction of marketing margin in the long term due to the need to decrease the fund’s debts.
The analyst suggested that a 2 baht/liter price hike would result in an inventory gain of approximately 140 million baht for PTG, representing an upside of 10%. Meanwhile, OR was expected to see an inventory gain of 400 million baht, translating to a 3% upside from Kasikorn Securities’ 2024 estimated figures.
The analyst maintained a “Buy” recommendation for PTG, with a target price of 11 baht, and a “Hold” recommendation for OR, with a target price of 20.20 baht.
