In threatening to move for nullification, the Federation of Consumer Organisations claimed that the privatisation had been carried out in a poor manner as only a few Thais had been allocated shares during the initial public offering in 2001.

Some members of the privatisation preparation committee, including former governor Viset Choopiban, who is now caretaker energy minister and former industry-ministry permanent secretary Manoo Leopairote, became shareholders of the company, they pointed out, indicating possible conflicts of interest.

They also said that through the two natural-gas pipelines and an upcoming third one PTT monopolised the natural-gas business and that the pipelines along with other rights granted it when it was a state enterprise should be returned to the state.

In a briefing to Nation Group reporters, PTT president Prasert Bunsumpun and senior executive vice president Pichai Choonhavachira insisted the privatisation had been legally conducted. They said the IPO shares had been allocated fairly. Though all the shares were sold in less than an hour, PTT share prices moved up slowly in the initial period, they noted suggesting that there was no profit-taking.

"At that time, some newspapers compared our stock to Por Tek Tueng," Prasert said, referring to the charitable organisation which speeds to crime scenes to collect corpses. PTT stock was initially considered dead.

Prasert expressed his frustration at being a target.

"We're professional managers," he said. "We have nothing to do with politics, and we have done our best to build up the company's value."

Prasert reiterated his vision that PTT should remain a public company as that would ensure management flexibility and reduce the state's burden in financing expensive energy projects.

Since privatisation in 2001, state ownership in PTT has increased from Bt20 billion to nearly Bt500 billion, he said.

As of April 7 its market capitalisation stood at Bt721.69 billion, he said, which by virtue of the Finance Ministry's 52-per-cent stake and the state-linked Vayupak Fund's 15.6-per-cent stake came out to a combined state holding of Bt491 billion.

"With that stake, PTT remains a state enterprise. Together with Thai individuals, the combined Thai shareholding exceeds 80 per cent, and the number of direct and indirect Thai shareholders is over 11 million. PTT's rights and returns are still going to Thailand and Thai nationals," Prasert said.

The company has put in an impressive performance, including stronger financial status, debt-restructuring, reorganisation, business expansion and management flexibility, he said.

In the past four years PTT has contributed Bt140 billion in of tax and dividends, he said.

In the next five years it plans to invest Bt600 billion and expects to raise over Bt300 billion in returns for the state, which can channel it into other investment projects, he said.

Most importantly, since 2005 when energy prices shot up, PTT has been instrumental in bringing down the retail prices of fuel oil and natural gas to power plants and of liquefied petroleum cooking gas, he said, in a period in which the combined subsidies exceeded Bt15 billion.

PTT now has two natural-gas pipelines, one from the Gulf of Thailand and the other from the joint development area in the South. Prasert insisted that though PTT was the single owner and operator of the pipelines, this did not mean that the company monopolised the industry. He said PTT had invested in the first pipeline 20 years ago when nobody showed any interest.

"Gas prices in Thailand remain lower today than in many countries because we quote average prices for the gas that is transmitted through the two pipelines, but for the which they could have been higher," Pichai said.

Prasert also insisted that PTT did not fix the price of gas supplied to the Electricity Generating Authority of Thailand or the gas transmission fee. Profits from the supply of gas to power-producers account for only 9 per cent of the total, while investment in the pipelines in the next five years will account for Bt238 billion or 38 per cent of the company's total investment budget, he said.

On the refining business, he said, PTT has despite the sharp spike in oil prices not reaped the huge profits people assume it has.

"In recent years refiners around the world have borne huge losses. Though refining margins have increased, many are still suffering from accumulated losses," Prasert said.

On the Energy Policy and Planning Office's information, the average refining margin in 2001-2005 stayed at US$3.9 per barrel or Bt0.80 per litre.

In the industry it is estimated that a new refinery with a capacity of 150,000 barrels requires an investment of US$2.5 billion (Bt94.5 billion) and the average refining margin in a 20-year period that would justify the investment is US$6 per barrel or Bt1.5 per litre.

"Refining margin is not equivalent to net profit. It's the differential between the average prices of all finished products and the average price of crude oil. It does not take into account construction expenses or other expenses such as energy costs and interest charges," PTT said in a document that was specially prepared to explain the points of public concern.

Against public criticisms that PTT has taken huge profits from the gas-pipeline and oil-trading business, Prasert said it had been operating in several businesses through nearly 100 affiliated companies. In 2005 these affiliates, including PTT Exploration and Production Plc, contributed 62 per cent of the company's net profit, and of the remaining 38 per cent, 11 per cent was contributed by the gas-pipeline business, he said.

PTT said that with its strong financial performance it could relieve the burden of Thais hit by higher oil prices and had in 2005 shouldered about Bt15 billion in subsidies for oil, cooking gas and electricity.

"Many demand we remit all the returns to the state so that the government can use the money to subsidise energy. There is a better way. The government can raise corporate tax from 30 per cent now to, say, 40 per cent," Pichai said. "However, it is naive to say that while the people suffer PTT generates huge profits, so it should be returned to the public. Why not let us continue as a private operator? As long as we're financially strong, we can help Thai people."

Achara Deboonme

The Nation