The spread between petroleum products and raw material price The spread between petroleum products and Dubai crude oil price • Naphtha Spread - Higher: Naphtha - Dubai spread in 2023 was USD -13.0 per barrel increasing by 2% from USD -13.2 per barrel in 2022. This was because Naphtha crackers reduced their utilization rates to align with sluggish petrochemical market being stemmed from unrecovered Chinese economy. The situation was gloomed by China’s property crisis, hence curbed sales of electrical appliances chaining to petrochemical product demand. • ULG95 Spread - Lower: ULG95 - Dubai spread in 2023 was USD 16.7 per barrel decelerating by 11% from USD 18.8 per barrel in 2022. There were demand supports from China reopening and Lunar New Year in early-2023. However, China announced petroleum product export quotas after that, which reflected notfully recovered demand for logistics and transportation in China. Gasoline demand in the U.S. during the driving season was also curbed to be lower than initially expected owing to inflation. 1.1.4 Crude Price and Petroleum Products Spread Average Price 2023 2022 %Change Dubai Crude Oil (USD/bbl) 82.10 96.34 (15%) Petroleum (USD/bbl) Naphtha-Dubai (13.0) (13.2) 2% ULG95-Dubai 16.7 18.8 (11%) Gas Oil 0.05%S-Dubai 21.9 34.3 (36%) FO 180 3.5%S-Dubai (10.3) (14.1) 27% Lube Base Oil (USD/MT) 500SN-FO 180 3.5%S 547 678 (19%) 150BS-FO 180 3.5%S 745 837 (11%) Asphalt-FO 180 3.5%S 16 16 0% • Gas Oil Spread - Lower: Gas Oil - Dubai spread in 2023 was USD 21.9 per barrel softening by 36% from USD 34.3 per barrel in 2022. In 1H23, Diesel spread was pressured by warmer-than-normal climate and relieved concerns over Russia-Ukraine conflict from that in 2022. Still, Diesel spread in 3Q23 boosted owing to protests in France affecting refinery operations, along with China’s third batch of petroleum product export quota of 2023 being announced in September, which delayed from initially scheduled in July. In addition, Russia announced a ban on petroleum product export in late-3Q23, which was lifted in earlyOctober, thus relieved concerns over Diesel supply during winter and declined Diesel spread respectively. • Fuel Oil Spread - Higher: High Sulphur Fuel Oil (HSFO) - Dubai spread in 2023 was USD -10.3 per barrel developing by 27% from USD -14.1 per barrel in 2022. The spread shot up in mid-2023 thanks to demand for power generation in the Middle East. Limited Fuel Oil supply following OPEC and allies’ crude oil production cut and Saudi Arabia’s voluntary cut also helped upsurge the spread. 174 Management Discussion and Analysis (MD&A) IRPC Public Company Limited
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