Inventory losses in Q4 puts Thaioil in the red

Thaioil Public Co., which operates Thailand’s largest refinery, reported in early February their biggest ever net loss of 8.4 billion baht (US$241.39 million) in the fourth quarter of 2008, compared with a net profit of 3.4 billion baht (US$96.85 million) a year ago, as inventory losses ballooned on the back of falling crude oil prices. Thai refiners are required to maintain crude oil inventory equivalent to 18 days of consumption, but typically maintain 30 to 40 days for logistical reasons. Losses from the inventory valuation resulted in the company’s refinery business to post a net loss of 9.2 billion baht (US$262.05 million) in the fourth quarter of 2008 compared with a net profit of 3.1 billion baht (US$88.30 million) in the same period a year ago. (February 12, 2009)