Clarifying 'Refining Margin': What it is and How it's Calculated

MGR Online•Economy•16d ago

Reader Briefing

Thailand's Office of the Energy Policy and Planning clarifies the concept and calculation of refining margins, explaining the current high rates and their impact on fuel prices.

•The refining margin (GRM) is the gross profit difference between refined oil value and crude oil cost.
•The calculation involves averaging crude oil costs from three sources and the market value of various refined products.
•Current high refining margins are attributed to global energy market volatility, such as geopolitical conflicts, but are not unprecedented.
•Refining margins are only one component of domestic fuel prices, which also include crude oil costs, taxes, and other fees.

Overview

•The article addresses public concern over rising 'refining margins' and speculation about abnormal refinery profits.
•The Office of the Energy Policy and Planning (OEPP) defines refining margin (GRM) as the gross difference between the average value of refined petroleum products and the average cost of crude oil.
•Refining margins are an estimate of preliminary profit before deducting expenses, not the total profit.
•An example calculation from OEPP data on March 18, 2026, shows a refining margin of approximately 4.91 Baht/liter.
•Recent increases in refining margins are due to global energy market volatility, such as geopolitical conflicts and supply concerns.
•In normal conditions, Thailand's refining margin is typically around 1.50-2.00 Baht/liter, with higher rates seen during global crises like the Russia-Ukraine war.
•Domestic fuel prices are determined by multiple factors beyond refining margins, including global crude oil prices, taxes, and operational costs.
•The government needs to communicate facts quickly and directly to the public to reduce panic and misinformation about energy prices.

Full article content is available on the original source.

Read on MGR Online (Thai Version)View in Google Translate

Source: MGR Online (Original)

View Original Article

Key Quotes

Office of the Energy Policy and Planning (OEPP)

"What is the refining margin? The refining margin, or Gross Refining Margin (GRM), in the refinery industry, means the gross difference between the average value of refined petroleum products and the average cost of crude oil purchased by the refinery."

ค่าการกลั่น คืออะไร ค่าการกลั่น หรือ Gross Refining Margin (GRM) ในทางอุตสาหกรรมโรงกลั่น หมายถึง ส่วนต่างขั้นต้น ระหว่าง “มูลค่าเฉลี่ยของน้ำมันสำเร็จรูปที่กลั่นได้” กับ “ต้นทุนน้ำมันดิบเฉลี่ยที่ซื้อเข้าโรงกลั่น”

Office of the Energy Policy and Planning (OEPP)

"Therefore, the refining margin is only an estimate of the refinery's initial profit before deducting various expenses, excluding crude oil premiums, increased shipping costs, and others."

ดังนั้น ค่าการกลั่นจึงเป็นเพียงตัวเลขประมาณการกำไรเบื้องต้นของโรงกลั่นน้ำมันก่อนหักค่าใช้จ่ายต่างๆ ไม่รวมค่าพรีเมียมน้ำมันดิบ ค่าจ้างเรือที่เพิ่มขึ้น และอื่น ๆ

Key Entities

Organization

Office of the Energy Policy and Planning(สำนักงานนโยบายและแผนพลังงาน)ℹ️

The organization that explained the calculation and context of the refining margin.

Place

United States(สหรัฐอเมริกา)ℹ️

Mentioned as a potential source of geopolitical conflict affecting oil supply.

Middle East(ตะวันออกกลาง)ℹ️

Cited as a region where geopolitical conflicts can impact oil supply and influence refining margins.

Singapore(สิงคโปร์)ℹ️

Identified as a major hub for trading refined petroleum products in the region, referenced for average product value calculations.