PTT Plc, the national oil and gas conglomerate, forecasts Thailand's fuel consumption will increase by 2-3% this year, in line with the country's economic growth.
The outlook was trimmed from the previous forecast because demand is expected to slip after subsidy cuts, said Auttapol Rerkpiboon, senior executive vice-president for oil business.
Over the past two years, energy policymakers have started to float fuel prices by gradually cutting subsidies for diesel, petrol and cooking gas.
With the universal subsidies, Thai energy prices were distorted for more than a decade, causing the state to miss out on large amounts of revenue.
As a result, when global oil prices fell by more than 50% in 2014-16, growth in fuel consumption soared by double digits.
"They [oil prices] have got back to normal," said Mr Auttapol. "They have passed through a consolidative phase over the past two years and now global oil prices have started to revive to US$50-55 (1,760-1,936 baht) a barrel."
He said plans to spin off PTT's oil and retail businesses will go ahead this year. The company is in the process of seeking approval from energy and economic policymakers.
Fuel is among the businesses that will be transferred to PTT Oil and Retailer Co (PTTOR), as well as wholesale and retail sales of diesel, jet fuel and liquefied petroleum gas (LPG). But the project excludes a LPG depot in Chon Buri, which will be under PTT's infrastructure department.
Tentatively, PTTOR's assets come to 67 billion baht. Last year, it gained earnings before interest and tax of 13 billion baht, equivalent to the previous year.
PTTOR plans for 40 billion baht in capital expenditure over the next five years. For this year alone, it has set aside 10 billion for petrol station expansion, improvement of oil depots and automation.
Mr Auttapol said PTTOR may focus on non-oil business for the next several years in order to handle the stiff competition in Thailand's oil retail business.
This year PTT expects to resume talks with a hotel chain to invest in hotels at its petrol stations after recent talks fell through.
The hotel business plan is expected to be finalised this year.
Mr Auttapol said PTT's first non-oil franchise business, Cafe Amazon, was recently approached by Oman Oil Company, which aims to operate three branches of Cafe Amazon in Muscat. That deal is still being negotiated.
Last year, Cafe Amazon sold a franchise to a Japanese firm, Codomo Energy Co, resulting in the opening of a Cafe Amazon branch in Fukushima. There are also plans to operate two more branches in Osaka.
PTT reported its fuel sales grew 12% year-on-year in the first 11 months of 2016, while overall Thai petrol consumption grew 10%.
