Page 41 - PSTC - One Report 2023 (EN)

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Power Solution Technologies Public Company Limited
2. Risk Management
The Company has risks that could significantly affect its operations and performance. Thus, the Company has set in place preventive and corrective guidelines for risks, which can be summarized as follows:
Risks from the Coronavirus (COVID-19) Pandemic
The coronavirus pandemic 2019 (COVID-19) caused an economic slowdown and affected most businesses and industries such as supply chains, consumer spending, restriction or interruption of production, delayed operations, etc. The situation has affected companies, particularly the construction businesses, due to slowdowns of major public and private projects, including fuel product distribution businesses, because the industrial and transport sectors have Gas consumption has declined, particularly during the first wave of COVID. Then after the COVID situation began to ease, the economy recovered. As a result, sales of the fuel distribution business have increased. Nevertheless, the situation has begun to ease up, and the overall situation improved in 2023. In addition, the Company has a way of finding new businesses to replace major public and private project delays, including investing in private PPA businesses.
Strategic and Operational Risks
1) Changes in Customer/Consumer Behavior or Needs
As some car users have switched back to fuel instead of NGV, as well as having more alternative energy sources such as electric vehicles due to the gradually increasing retail price of NGV in line with the policy of restructuring fuel prices to reflect the government’s costs, fuel consumption has increased, while NGV use has declined.
The company has guidelines for preventing this risk by entering into negotiations with large transportation companies to use services at the two automotive natural gas (NGV) service stations to boost sales. It also plans to increase the sale of other goods and services in the company’s two service stations. Furthermore, both service stations remain under the PTT brand, so they can effectively build customer confidence.
2. Risks related to changes in government policies and enforcement of new laws or regulations:
Currently, the government continues to subsidize the price of liquefied petroleum gas (LPG) using funds from the gas fund, as announced by the Energy Policy Administration Committee (EPAC) after gradually increasing the price of LPG from April to September 2022 to reduce the burden of compensating the oil fund. In the future, there is a trend for the government to gradually reduce the subsidy for the sale price of LPG in the country and allow the price of LPG to follow market mechanisms. This may impact the retail price of LPG used as fuel in vehicles and in industrial and household sectors, reflecting the true cost of distributing LPG. The complete liberalization of the LPG market policy will pose risks for companies and other LPG traders from price fluctuations.
The company has strategies to mitigate these risks by closely monitoring relevant laws and negotiating price adjustments with customers in advance to provide customers with flexibility in managing gas costs and increase sales to industrial customers due to their continuous and relatively high usage.