The Thai government plans to establish a strategic oil reserve in addition to the one legally required for commercial purposes.
The new reserve will help Thailand deal with potential supply disruptions and global oil price fluctuations, according to a Bangkok Post report citing Metta Banturngsuk, director of Energy Policy and Planning Office (EPPO).
Thai laws require oil refineries and companies to hold crude and refined oil reserves equal to 5% of total sales for 18 days. The country currently has 36 days of reserves for crude and refined oil products, equivalent to 25 million barrels per day.
The mandated reserve does not include extra stocks kept voluntarily by the oil companies. In all, the country has reserves equivalent to 40-50 days of use.
Mr Metta said Thailand needs to set up a new reserve because of its heavy dependence on oil imports, which are about 95% of total demand. Thailand consumes the equivalent of 700,000 barrels of oil a day.
The Thai government has commissioned a study on building storage facilities for the strategic stockpile. The study will look into the size, cost and location of a new oil reserve, and will be completed in two months.