Thailand Instructs Traders to Halt Diesel Exports

In a strategic move to address potential challenges during maintenance activities, Thailand has issued a directive mandating a suspension of diesel exports for traders. This directive aligns with the ongoing maintenance activities on Thai Oil's No. 3 crude distillation unit (CDU) located in Chonburi province. The primary objective is to prevent potential local diesel shortages during the 13-day maintenance period of the unit, scheduled to conclude on January 28.

The No. 3 CDU operates within Thai Oil's significant 275,000-barrels-per-day refinery, situated near the port of Laem Chabang in Sriracha, Chonburi province. As the largest among the three crude units, it boasts a processing capacity of 180,000 barrels per day. Sarawut Kaewtathip, the director-general of the energy ministry, emphasizes the proactive implementation of measures to address and mitigate any potential shortages. Discussions are ongoing with traders and refineries to ensure preparedness for various scenarios that may arise during the maintenance period.

Within the energy ministry, the energy business department has issued directives to oil traders, instructing them to halt the export of high-speed diesel, except in necessary cases. This strategic decision aims to bolster the domestic supply and meet demand seamlessly during the ongoing maintenance period. While the supply of petrol and jet fuel remains stable, Sarawut points out that the high-speed diesel supply is currently "quite tight." To ensure an ample supply, up to 20% of legal diesel reserves can be sold.

Throughout the initial eleven months of 2023, Thailand recorded the exportation of five billion liters of diesel, valued at $3.6 billion, constituting approximately 1.4% of the total exports during that period. The temporary suspension of diesel exports aligns with the broader goal of prioritizing the domestic market's diesel requirements and mitigating potential disruptions to the local supply chain.

This strategic maneuver underscores the intricate balance required between domestic needs and international trade dynamics, particularly during maintenance activities that impact critical sectors such as energy production. The proactive measures taken by Thai authorities highlight a commitment to ensuring a stable energy supply for the local market, showcasing their ability to navigate potential challenges associated with the maintenance of vital infrastructure.

As the duration of the export suspension unfolds, continuous monitoring and adjustments will be essential to address emerging requirements and maintain a seamless flow within the domestic energy sector. This decision not only showcases the prioritization of local needs but also highlights the intricate interplay between national energy policies and global trade dynamics. It serves as a testament to Thailand's commitment to sustainable and secure energy practices, ensuring the well-being of its citizens and the resilience of its energy infrastructure.