Good morning. My name is Chutathip Pachiyanukul, Assistant IR Manager. I would like to welcome you to Star Petroleum Refining analyst meeting for the third quarter of 2024 performance. Before we begin, I would like to introduce SPRC management team who are in the meeting with me. Let's start with Mr. Robert Dobrik, our CEO. Next, Khun Shashank Nanavati, Executive Vice President, Commercial. Then Khun Nutsara Somkiatweera, Vice President, Finance and Accounting. We have Khun Sakchai Thamsuruk, Vice President, Value Chain Optimization. Also have Khun Nongnapa Thongpitukthavorn, Acting Investor Relation Manager. The meeting today will refer to the presentation that is available on SPRC website. Today's meeting will begin with the key highlight by Khun Robert, then follow by performance analysis by Khun Nongnapa, then back to Khun Robert again for looking ahead before the Q&A session.
If you have any questions, please just click on the right-hand button or send the question through the chatting channel. As a reminder, this virtual meeting is being recorded. At this time, I would like to now turn the session over to our CEO, Khun Robert Dobrik. Please go ahead.
Thank you. Thank you for joining us today. Just an opportunity for us to refresh, hopefully, what we've kind of communicated in the past, but hopefully reinforce some new information for you as well. If you don't mind, go to the next slide. This is a visual that kind of describes a little bit to us is how our center really is focused around driving net earning shareholder value, both near, medium, and long term. It's really understanding our competitive environment, through a variety of benchmarking means, and really driving ourselves to what defines competitive in different dimensions of our business. As our business grows into different areas, understanding what's competitive and continue to drive to be competitive in a sustainable manner. That's the overarching high-ending thing we're hoping.
We recognize to get there, we have to manage different key value drivers in our business. One, first and foremost, which is a big focus for us in this current year as we integrate our fuels and marketing and recently acquired fuels and marketing business with our refining business, is how to really drive an enterprise margin mindset. You could make money here but at the expense of this. You could make money here at the expense of that. But really putting our teams together to creatively integrate where we see value and go after that directly with various customers and new sales channels, has been a key focus for us in this particular year. We always have to be reliable and maximize utilization as much as margins allow us.
So quarter to quarter, we may ever so slightly adjust our utilization based on where we see the margins. We are not about to drive just throughput for throughput's sake. Really, every quarter, we really drive what was the right combination of products, crude purchases, and the rates to drive maximum value. So it is that reliability and utilization, and being reliable each and every day, each and every quarter to drive the maximum value. And thirdly is really around cost efficiency. We do not want to be penny wise and pound foolish. We want to make sure that we spend the money we need to drive the reliability and the efficiency.
We are not afraid to do some things to go after some enterprise margin, but we need to be conscious around our competitiveness cost per barrel, and if we want to be arguably competitive, we always have to keep an eye on that particular parameter. And fourthly is really around smart investments. We can invest anything. We could do many things. We could be proactively moving forward on some technologies and opportunities, but unfortunately, the margins many times are not there. So we have to be careful a little bit in terms of as we look for opportunities to pivot towards lower carbon solutions, find the right moments, make sure that there is either near term margin opportunity or the margin opportunities exist in the longer term, and there is the right regulatory support environment to support the sustainability of those margins.
So, if we put all these pieces together right, we are going to drive maximum shareholder value. We do this and our outer ring really speaks to operational excellence. This is our foundation of safe and reliable, efficient, energy efficient. We understand our customers, we understand our communities. It is really working those issues, which is our license to operate. Making sure everyone goes home safely every day is core to our values. But ultimately, we also make sure that our org capability is capable to not only deliver that in the moment, but actually the org capability is growing to drive future value in our business. Separately, how do we leverage digital information more effectively, so that we can move faster and quicker to creative new outcomes?
When we put all these pieces together, we believe we can drive to a competitive performance that outperforms others in the market, and that is our challenge for us to deliver on. So maybe from there, I will just move to the next slide. In the quarter, I think if I look back at the year so far, the first quarter was a pretty strong margin environment in general, both even somewhat on the refining side, at least. The second quarter was materially different. Once again, probably a low spot in the year in terms of margins on many fronts. This third quarter is a bit of a mix. I think we are seeing improving refining margins. I think there is a little bit of challenges on the retail side, just given some of the weather that we experienced and flooding in different areas and parts of Thailand.
Some dimensions of our business probably work through in the third quarter. But in general, we've been seeing improving margins. Our bottom line is, even though we have a quote unquote "consolidated earnings loss" in the third quarter, a lot of that was driven by stock loss. We'll get into the details. Khun Nongnapa will provide you the details later on. But on a cumulative basis, we're continuing to drive consolidated earnings and consolidated net profit as we've captured there. Once again, the margins were improving from the second quarter up to about THB 514 a barrel on an enterprise basis. We're continuing to find ways to grow value beyond. As I mentioned in the previous slide, we're trying to really find integration benefits, and this is where our teams are working as one team.
Not around whether I achieve metric in a particular parameter, but it's really around how do we make sure that we understand the opportunity from an enterprise perspective. Excited to see that in this past quarter, we yielded almost another $7 million in synergy benefits associated with this acquisition. Year to date, we're almost approaching $23 million of synergy benefits connected to the fuels and marketing business and the synergy ideas and opportunities that we're creating. Our availability was quite strong this past quarter. Likewise, we're seeing year-on-year station growth. Once again, a little tempered in this most recent quarter just because of some of the weather dynamics. But year to date, we're looking at almost 18% growth in our same store sales.
It's some good performance from our retail business, which is a very smaller segment of our business, but still it's good to see the year-on-year growth in that area as well. Next slide. This just speaks to how we think through the value chain. We've got the refinery where we create a variety of products, some of which is marketed in our retail network. This is approximately, I want to say, probably 25% of our ballpark diesel and gasoline products that we generate at the refinery are currently marketed in our current retail business. The rest is marketed in other sales channels across Thailand and the region. But how do we continue to. We see that our fuels marketing business as an opportunity to place more barrels in a value, one of our higher sales channels, return sales channels.
We're looking for ways to, as we showcased earlier, grow our year-on-year, grow station sales year-on-year, and likewise look for advantages to where we can grow the actual network. In the most recent quarter, we announced, just early September, was the expansion of our network to include Pure, formerly branded with others. They've joined our network, and we're excited to have nominally almost 80 new stations join our family, so to speak. Look for us to be able to connect customers to more and more of a retail network. Likewise, we've expanded to some partnerships, some backward partners with Chao Doi Coffee to bring in a quality, well-known brand into our retail stations to where, once again, that can create some additional value, but also create some additional opportunities to grow station growth through the period.
These are just a few examples of how we're looking to grow value, but it extends beyond. This is just maybe a catch-on flow. Next slide, please. But once again, when we talk about channel optimization, retail is just a, it is one channel. There's multiple ways to grow value than solely retail. We're looking quite carefully across for different products. Each product has its own diversity of sales channels. So whether you're talking jet, whether you're talking asphalt, whether you're talking gasoline, whether you're talking diesel, whether you're talking other products, we need to try and find the optimal sales channel for each of those to maximize value at the enterprise level. We're constantly looking at ways to really think through our sales channel and expand perhaps our purview of what's possible.
It's not only in Thailand, but there may be some opportunities in the regional level to grow our sales channel. Certainly, we're looking at new supply agreements. It's creating some element of risk, but also tremendous opportunity for us to continue to expand our direct-to-customer sales opportunities. Logistics, things that were formerly bottlenecked, and this is an example of how synergies create value is. Before, you'd be arguing about, "Well, you pay for it, I pay for it." But, if you can't get connected on the margin opportunity, some of these things never happen. When you actually open up the aperture and you say, "Hey, here's how we can create value by making some limited investments," in some cases, no investments. It actually creates a lot of value for relatively low infrastructure. So for example, as you know, our ship and truck loading operation.
We've looked for ways to optimize that operation without expanding, per se, any actual architecture, any hard work, but actually looking at maybe putting on additional shifts or some different scheduling to allow us to bring more volume through something that already existed. Some of these opportunities are just really the teams working together to really optimize, identify different new opportunities. We will move on to the next slide. Amelia, at this point, I'll turn it over to Khun Nongnapa to walk us through just some of the detailed performance analysis. Khun Nongnapa?
Thank you. Okay. For the next part is the performance analysis. We start with the market indicator. Looking at the top left of the chart, the average crude Dubai and Murban decline quarter-on-quarter and year-on-year. Dubai in Q3 was $78 per barrel, decreased about 8% from prior quarter due to the demand growth concern in China and U.S. economic data, even U.S. stock drawdown. Singapore crack, product crack over Dubai in Q3 was slightly softened quarter-on-quarter, but significantly dropped year-on-year. Gasoline spread over Dubai in Q3 was $11 per barrel, drop of 15% from easing summer driving demand in U.S., with higher export from China and South Korea. Jet crack spread over Dubai was $13 per barrel, remained quite flat due to the softened summer air travel amid high inventory in U.S. and Europe.
For the crack for the diesel was $13 per barrel, about 8% drop from prior quarter as regional ample supply with high stock in U.S. and Singapore. For the macroeconomic indicator, the country consumption to date was improved to 2.7 billion liters per month. The International Monetary Fund forecast Thailand macroeconomic indicator, real GDP and inflation gradually increased moving forward. We expected to see return from consumer partners and continue to invest and grow. This is the impact of key market indicator to our performance. Next slide, please. For the financial performance in term of the consolidation, as Khun Rob mentioned, this quarter is kind of mixed. SPRC faced several challenges in the oil market like weakened refined product cracks, geopolitical tension still going on, concerns about economic uncertainties and recession, which dampened the demand for the products.
Oil market had unfavorable impact from stock loss, as you see the crude price that we just show. This impact to our bottom line earnings. Also, as mentioned, low seasonal demand for the fuel business because of the rainy season and also some flooding in northern of Thailand. Despite these challenges, as Khun Rob shared, in the highlight, we operate with high reliability and improvement in term of the efficiency, which contributed part of that from the BLIP, Bottom Line Improvement Program. We also managed to improve the core earnings this quarter and nine months to date. From the number there, the number based on the consolidation and included the fuel business and Topline shares. The prior year number prepared based on the business combination under the common control for the comparative purpose.
Comparing quarter-on-quarter, year-on-year and to date nine months, EBITDA and net profit decreased significantly, mainly due to the stock loss from oil price drop, as shown earlier, and also the crack. However, the core earnings improved for the nine months to date. Based on the integration benefit and operational reliability after the SPM comeback. For the right-hand side is the Net IBD/Equity ratio. Balance sheet is still healthy, and we maintain debt to equity ratio below 0.3. Next slide, please. For the refinery financial performance, comparing quarter-on-quarter and year-on-year, accounting margin, refining margin decreased to loss $1.55 per barrel due to stock loss of $4.47 per barrel. And net loss from inventory write down to Net Realizable Value of $1.32 per barrel from the crude price and the crack.
Marketing margin was $4.24, which higher than market of the Singapore margin after the SPM resumption and less ship-to-ship cost. For the nine months, accounting refining margin decreased to $4.45 per barrel from stock loss, which outweighed the favorable impact from revenue increase 5% and declining of freight and crude premium. For the OPEX, the Q3 2024 comparing to the prior quarter and prior year, OPEX slightly increased to $2.72 per barrel. This from the routine normal activity and the timing of the spending. While we continue to manage OPEX spending for nine months within $2.30, which are lower than the same periods of the last year. We continue to control and make the cost efficient in everything that we do. For the refinery EBITDA, Q3 refinery EBITDA is a loss $50 million, and nine months $137 profit. Next slide, please.
For the fuel business performance, after the integration, this quarter was quite low because of the low seasonal demand from rainy season and flooding, as mentioned earlier. It does impact to lower equity sales volume and same-store sales growth. Equity sale volume proportion for retail and direct sales in this quarter was 55%. Same-store sales growth year-on-year, we maintain in double digit of 11%. However, we still maximize the domestic placement with higher margin and more volume throughput per station. Sale volume to domestic in Q3 was 92%, higher than the prior quarter of 89%. Volume throughput per station to date 9 months increased approximately about 23% to 282K liters per month, comparing to 230K liters per month average of the prior year. As of September, number of station was 524, which the market share gradually increased to 5.4%.
Continue to make selective investment to adding value to our networks. Next slide, please. For the ESG, in term of the environmental, social, and governance, we continue to operate, partner, and create value to our key stakeholders. Also working and driving to lower carbon environment, support the communities, and maintain strong governance. As of September 24, we continue to operate with zero recordable spill incident, maintain top performer in term of the energy efficiency management, and reflect to our EEI index, and continue to handle waste disposal not through landfill method. Almost THB 170 million spending to date for the investment initiatives around the environment and support the communities, 90 communities and fishery groups. The key projects still going on as reported last quarter. Gas turbine energy loss improvement reduce the cogen fuel consumption and eliminate the greenhouse gas emission.
Installation of continuous emission monitoring, fence line air quality monitoring system which turn to real time emission monitoring tools. Partnering to extend the retail station to utilize the solar rooftop. This quarter, we also received the award, for the Environmental Governance and Safety Award from the IEAT, Green Star - White Flag Award for the year 2023. Also, in September, we received the Best Companies to Work for in Asia 2024, in term of the Diversity, Equity, and Inclusion Award, Most Caring Company Award, and Sustainable Workplace Award too. Yeah. I think I'll pass back to Rob to cover a few slide. Yeah. Thank you.
Yeah. Thanks, Khun Nongnapa Great summaries. Look, just maybe looking a bit ahead and just trying to cascade, continue to build on what we've been doing, but really looking for us to optimize and maximize value. We've got an upcoming shutdown in 2026. We've moved it from 2025 to 2026. Really, we're targeting what I would characterize as generally, relatively low cost, high return type projects, quick payout. There's no major capital projects, so there's no long-winded investment periods without any returns. Generally, whatever we invest in up until the turnaround, we'll actually be getting returns on it the day after we start up. So we're really focusing on quick return type opportunities. Similar to our retail business, we're looking for, to make sure that anything we invest, we're going to get a return on our investment.
We track every investment we do make and constantly do look back so that we can learn to make sure that every investment creates value for our shareholders. But once again, we're going to continue to look for opportunities, not be afraid to invest, but make sure that those investments are going to yield value. Continue to explore synergy opportunities. It's interesting to watch as you open up the aperture, the creativity starts to get even quite impressive. People that are hesitant historically about not being able to do something, once you start showcasing, they have the right to come up with ideas and throw those ideas out there. It's interesting to see how the environment continually responds to it. We're really excited about the early wins, and we think we can continue to build on those wins moving forward. We see some opportunities.
There's a variety of fronts, and we're constantly challenging ourselves on new fuels of the future, new types of energy that may or may be competitive into the long term. We obviously are advantaged over many in our peer group by having a fairly capable major shareholder in Chevron that's constantly looking at, has a technology venture company, has a technology company, has Chevron New Energies companies that are actually placing activities and are quite active in variety of markets, whether it be in the U.S. or other. We actually get to benefit from their learnings, both positive and other, to understand what are the types of things we need to see in this environment to apply some of those when and if the margins and opportunities exist.
It creates a competitive advantage for us as we start to look at different opportunities, whether they be bio and circular opportunities with petrochemical or other. I think we may need to back up in slides, perhaps. Thanks. Let's say once again, I think we're trying not to do this where we feel like we have to do everything ourselves. A lot of the future opportunities are really going to be around partnerships. How do we identify who could be some of our strategic partners to compete into the long term? Once again, not get into arguing about what slice of the pie that everybody's going to get, but actually figure out ways to make the pie ever so bigger.
Continue to look for ways to grow the value and expand our portfolio of products, but do so with a mindset of it's got to create value. Similar to as we move over to the commercial and marketing focus, where once again is trying to look for ways to anchor production into the highest net back channels. Sometimes, many cases we've seen, hey, look, retail is an opportunity for us to grow to a certain extent. But once again, we want to make sure we're informed by how that creates value and so we'll continue to look for opportunities to invest, as we did more recently with Pure, but there could be other opportunities in the future that we see open up an aperture for value creation if we can get the right price at the right time, that actually we can see methodologies, great value.
We'll look for ways to increase our non-fuel retail network as where the economics make sense. This is just for ways to expand our revenue streams into areas that create more and more value at an enterprise level. We're excited about the opportunities we have, whether it be on the Historic refinery, open up the aperture to the type of products we make, and likewise with the commercial, is create new markets, create new customers, and create new opportunities to really anchor some of these volumes that we have in the refinery and beyond. If you want to kick to the next slide. Once again, as we talk about our journey, we talked about our performance wheel earlier. Really continue to focus as we move forward, high reliability and availability. That's our ticket, that's our performance. It's our calling card.
That's our history of being a highly reliable, safe and reliable operator in Map Ta Phut. We're going to continue to anchor on that base foundation of what's allowed us to be successful over the years. Said, we are expanding our aperture around ways to create value from an enterprise margin perspective, whether it be evolving our product mix, looking into new agreements with different parties, looking at our value chains ever so slightly different and really maximizing the best domestic product where it makes sense. There could be opportunities for us to extend to neighboring countries, and from a regional perspective, create even more value. Not opposed to opportunities to create value if and when we can see the opportunity. We benchmark very aggressively in terms of our costs. We understand different dimensions of our cost, and we typically aspire for first quartile.
We've generally been towards the first quartile in terms of cost efficiency. There's select areas where we've chosen to be perhaps more in the middle of the pack so that we make sure that we make the investments to drive that reliability, efficiency, and that growth opportunities in front of us. Finally, we've talked about smart investments. We see some measured bets that we'll be doing during the turnaround. We also are working with some partnerships around some opportunities, whether it be in pyrolysis processing, plastics reprocessing, so to speak. There tends to be probably some long-term trends and long-term opportunities in some of these areas. They're going to start small. They're going to start on a gradual basis, and we'll let the, how can I say? Let the value of those opportunities drive the next set of opportunities.
Continue to grow the business, but do it in a thoughtful and value mindset. We're continuing to work, try to create a one team. We work together. It doesn't matter which team we're in. We work towards maximizing enterprise value across the organization and leveraging our own capability, but also that of our major shareholder, to actually bring in capability, technology, personnel as necessary to create that next generation of opportunities in front of us. With that, I think I've probably got to the end of our slides and maybe we're, I think we're moving into Q&A. Khun Chutathip.
Okay. Thank you, Khun Rob and Khun Nongnapa. Now we have concluded our prepared presentation, and we are now ready to take the questions. If you have a question at this time, just click on the raise hand button or send the question through the chatting channel. Let me see. Okay, I saw Khun Naphat raising the hand. Khun Naphat, please go ahead. Unmute your mic first, please.
Hi, good morning, Khun Rob. Thank you for the presentation. I have a question on the run rate, because I noticed that we are running now at about 90%. Should we expect our run rate to be at this level, 90%-92%? Because in the past, we were running at about 98%-99%. Is that also the run rate level for Q4? Yeah.
Maybe I'll kick it over to Khun Sakchai to speak to a bit is, every period, we'll look at the cost of crude, we'll look at the product outlook, and then we'll try to dial in the optimal run rate that creates maximum value. It doesn't always say max. Max isn't always the right answer. It could be something slightly lower than max. Also the nature of the crude we're able to acquire, whether it be lighter crude like Murban and others versus some other things we could acquire. But we're constantly challenging ourselves to find that sweet spot. Honestly, quarter on quarter, sometimes the product, the actual margins dictate really where your opportunities are. As we went through a fairly low second quarter from a margin perspective. We've seen that recover slightly in the third quarter, partly driven by our SPM being back on service.
In the third quarter, from July 14 onward, we've eliminated the ship-to-ship, as Khun Nongnapa Thongpitukthavorn alluded to. So that probably provided a $1.50 a barrel headwind over what we were experiencing in the second quarter. So not fully realized in the third quarter, but now as we move into the fourth quarter and beyond, you start to see those headwinds. To comment, I think as the margins improve, typically our run rates improve. We go out, we need to be reliable during those moments, so we're ready to achieve some of those margins when they're available. Khun Sakchai, maybe I'll turn it over to you if you want to add any more context.
Thank you, Khun Rob. I think you covered most of it. The thing that I would like to add is, as you mentioned, I think the optimization of the, how we call the approach of the refinery get changed a bit recently, I think with the, I would say recently is probably a year. We start to see lighter crude is really econ for us to go for. From time to time, we might not run the CDU up to max, and sometime we actually slack a bit on the FCC as well on the cracker because we actually see the most econ to run lighter crude. I think, but if you look at the unit that support to really generate the most value, I think we landed max. The unit that we make jet, we actually upgrade the naphtha, we run max.
The unit that we run for diesel, we run max. As Khun Rob mentioned, I think going into Q4, we start to see better margin. I think per your comment, we start to see a higher utilization towards Q4.
Yeah, but I understand that is subject to the Singapore crack spread of a diesel jet, but assuming it is at about $16-$17 crack spread per barrel now. Can I assume that it should be over 95?
Yeah. I think it will lean toward that kind of level, Khun. That I can say.
Okay. Yeah.
We like to make money. Yeah, we like to make money, so when there's money to be made, we like to run at higher rates if that's what dictates. It's just saying during these, it's kind of like in between medium level margins, you got to be a bit more precise in terms of what products you make to be able to extract value. But as things progress to higher margins across multiple products, generally, you'll see us running towards almost full utilization as best we can.
Just one follow-up question on the BLIP, because I see the benefit that we are getting from BLIP, about $0.48, let's say $0.5 per barrel. And, we also resumed the SPM in July. And we were talking that this should contribute about $1.5 to GIM. But now we are getting GIM at about 4.5, which compared to peers, we are quite okay. But this is already factor in the impact from the SPM and also the BLIP. So without these two, our GIM should be like $3? Is that the way I should read or anything that you can make comments on this? Yeah.
Maybe I'll start, Khun Sakchai, and once again, I'll turn it over to you. I think you'll see on, let's say, second quarter, third quarter, even though Singapore spreads were actually pretty comparable, we actually made materially improved margin. A lot of that was driven arguably by partial quarter, having the full SPM availability and continuing to be available. There's nothing out there that suggests we won't have it available moving forward. It wasn't a full quarter of benefit. It was probably maybe two-thirds a quarter of benefit. So it's not fully realized through that quarter. But I think you see that we're starting to show differentiation from the Singapore spread, whereas before you could almost track us against the Singapore spread as being a premium over the Singapore spread.
Whilst we had the headwind of the SPM not available, we were probably tracking almost at Singapore spread. I would say as we move into the third quarter and beyond, I think you will see us move more to historic spread levels. Khun Sakchai.
Yeah, Khun Rob. Along to your message, I think to be a bit more detailed about how to look at these two numbers, I think probably SPM bring back us to a kind of a competitive level. Probably the level that we actually can compete and probably on average, we will be slightly better already. The BLIP is actually the thing that make us really on top of the competitor. I think that what I can say, Khun, is the 1.5 bring us to the, what you call, a kind of normal standard or slightly competitive, and then we make BLIP on top of that.
Yeah. Maybe just to clarify, when I used 1.5, I think we saw anywhere from $1.20 to $1.80. It was a range of things over the period. As a ballpark, we are saying $1, $1.50, but we are seeing that improvement in our margins realized since July.
Okay. Thank you. Next, I saw Khun Amonrat raising a hand. Khun Amonrat, please go ahead.
Thanks for your presentation. May I ask about the unit cost? Why is it pretty high this quarter compared to the last quarter? Because the crude intake is actually quite the same level. My second question is for Khun Sakchai. Because the fuel oil crack spread has been improving and the discount versus Dubai has been very narrowed. If the situation actually carries on into next year, we will see the higher leverage for the CDU because, it might not be bad to run at a higher rate. Thank you.
Yeah. Let me take the first one. Nutsara can add more detail. But generally, quarter-on-quarter, you will see some fluctuation just based on timing of activity. I think in the third quarter, I think we had some catalyst costs showing up in that particular quarter, which maybe distort that quarter versus prior quarters. But I think as Khun Nongnapa alluded to, our actual cumulative operating cost per barrel is at the $ 2.30 per level, which is tracking quite well against prior years, and very competitive generally. It is an area that we are thoughtful about. Once again, as I say, we want to be competitive on cost, but we also do not want to be to the point of where we do not invest in the reliability that we need to invest in.
We think we are close to our competitive levels. We are in the range of our historic competitive levels, and there is really no distortion. But on quarter-on-quarter, you may see some fluctuation based on specific activities that quarter. Nutsara, anything you would add?
Thank you, Khun Rob. Actually, you already covered that. That is mainly in terms of the normal pattern of the spending, that it can fluctuate quarter by quarter. But as Khun Rob mentioned that for total year spending, we still anticipate that we still try to control our cost and also make it
In terms of the cost efficiency, mm-hmm, to ensure that we are still competitive with peers.
Khun Sakchai, I think the question was, are you going to suggest we increase rates if there's money to be made? I'll let you answer the question.
Yeah. Thanks, Khun Rob. The question about fuel oil, actually, I share the same view. The fuel oil econ at the moment is getting better and expect that to carry on. The question about the run rate, actually, the posture is probably that's not significant different from today. The thing that come together with the econ of the refinery, of the posture of the refinery is probably on the crude premium as well. We need to look at the crude premium on the light crude versus the medium sour or heavy crude. I think the thing will get shared. One, we start to see a trigger that the medium sour or the heavy crude start to get more econ for us to get up and run. But so far, I think we still didn't see that.
Even the fuel oil crack improve, it just suggest that to run more medium sour or heavy crude, but at the same time, the heavy crude or medium sour also get expensive. That why we still not see that one. I think the posture of the refinery, at least in short term, we didn't see any big change. But I think as we talked earlier, I think because of the better margin that we foresee, we expect to run higher throughput and run rate in the Q4.
Thank you, Ka. Next, Naphat, Ka. Naphat, please unmute your mic and go ahead.
Yes. I like to ask about the production yield on page 23. One thing that I noticed is our production yield is for the gasoline at about 25% at this level. I understand that it depends on the crude slate and also the program that we are running our refinery. Given that the demand of the gasoline seems to be soften, can we make adjustment to our refinery or anything that we can lower, let's say, the gasoline to below 20% and boost up the middle distillate?
Sure. Maybe I'll leave Sakchai. We obviously try to optimize these, and there's a bandwidth we can optimize. Sometimes we recognize there's limits to how we can optimize, and those are the kind of things that surface these optimization projects that we have targeted for the shutdown. There's a range of which we can operate these, we can actually adjust these splits, but then we also see, hey, long term trends may suggest doing more, and that's when we'll be debunking select elements of the plant in 2026 to create some improved flexibility on creating yields in different environments. Sakchai, maybe you could take that on and give some context.
Yeah, Khun Rob. I think to answer that one, I think one information that I'd like to share is about the local demand. Actually in country, if you look at the demand and the supply in country, I think it suggests that the gasoline is actually more balanced than the diesel and middle distillate. I think with the domestic market, it still support us. We still seeing quite an econ to support us to keep maximizing the gasoline. To the question about what is the flexibility that we have, I think as you know, we have some synergy that we can do to break some of the yield toward the middle distillate if we want to. I think to the certain limit. There is some flexibility that we can do by just shifting some of the molecule to do the synergy with our peer.
Does this require CapEx to reduce the gasoline? Also-
No, actually.
Also when-
Go ahead.
Yeah. Also, when you say, because I look at the domestic demand, it's only 20% for gasoline, and we are producing more than 25. I wonder, are we overproduce, I mean, supply on the gasoline more than the demand?
Okay. Yeah. The first question is CapEx is no. The facility is already there, and everything is there. We operate synergy with the peer already. It's just we need to change the mode and change a kind of nomination or agree to do something when the situation come. We are ready to go, and we do that every day, okay, in term of the synergy exchange with our peer. The second question about the yield of the country demand. Yeah, you're right. I think the country demand this year is lower than our production, but there are some refinery that not produce gasoline. In overall, I think gasoline used to be a bit short. Even today, I think we lean toward balance in term of the production and the demand.
Yeah, that's a good insight. I think just to clarify, Khun Sakchai, we know when we're quoting country demand, that's a ratio of different products, but that's over the nominal million barrels of the product that are refined in the country. When we talk about SPRC's cut, this is our version of just our share. The two aren't apples to apples, I guess. Maybe that was your point, Khun Sakchai.
Yes, Khun Rob. Yeah, we should look at the country supply and demand. Because for a couple of years, we used to be short, we need to import, but recently, I think we above balance in term of the country supply and demand.
Yeah. If you pasted our nine months of 2024 compared to all the other refineries, you would get a better picture against this country demand. Just looking at our picture, it just shows that we are relatively meeting these demands of the country based on our mix as well. Hopefully that answered the question. Hey, Sakchai, there is a question in the chat maybe you could give a little bit around, why OPEX did not improve in this quarter despite the resumption of the SPM, apart from the impact of inventory write-down. I will unpack this a little bit, but we may not be answering the question. The SPM impact has been captured in our margins. We have seen a reduction in margins through the period, and now we are seeing an improvement in margins post the SPM recovery.
It is not an OPEX item, but it does impact cash, no doubt. Maybe that is the first question. You will not see that in OPEX. You will see that in the margin improvement moving forward. I am not quite clear on the inventory write-down. If you want to follow up with that question, please open up the mic and we will be happy to answer.
Thank you, Khun Rob. Okay, next, let me see any other guys who would like to ask the question. Okay, it looks like we covered all the questions already. Okay. I think we covered a lot of topics, a lot of great question here, and we are now getting close to the end of our time. Khun Rob, how would you like to say anything before we say goodbye all the participants?
Yeah. No, once again, thank you for joining. Once again, we are continuing to focus on the things that we believe drive value, recognizing that when we spend money, that we want to see a return on that money. So we are very conscious around leveraging any funds that we have available to make sure they are value creative type investments. As I say that, I think we are pretty faithful to delivering on dividends on any earnings we do generate. So continue to look for opportunities to reward our shareholders with dividend yields based on our earnings, and we see an improving environment as we move through the fourth quarter.
Hopefully we will be in a position to continue to reward our shareholders, not only this year, but in the years to come as we see probably an ever-improving refining margin window opening up in the coming years as there is, once again, less and less refining capacity and the few that remain can compete for hopefully a higher margin environment through that period. Once again, any moment in time you are going to see some nuances, some bubbles, as a result of this or that. But I think the fundamentals speak to a tightening of the refining capacity and really limited incentive for folks to make big investments. And the ones that have perhaps make big investments are probably preferring that they had not, because these projects are hard to deliver, and they take a long time. They cost a lot of money.
These big investments, and you are not really seeing any on the books right now. There is really nothing on the books. I think, once again, with SPRC's, with our actually relatively low debt ratios, we feel we are positioned to continue to invest where investments or opportunities arise, but we are also in a very strong cash position to continue to yield the profitable dividends for our shareholders moving forward. With that, I will just leave it and thank you for joining us today, and I look forward to visiting with you in the future.
Thank you very much.