Risk Factors Facing IRPC’s Businesses Summary of Risk Management Price Volatility Risk As signs of Thailand and the world’s economic recovery from the worst of the COVID-19 pandemic began to take hold, against the backdrop of the burgeoning US-China trade war, Organization of Petroleum Exporting Countries (OPEC) and OPEC Plus, the world’s crude oil suppliers, these emerged as major factors driving fluctuating crude oil prices that have a direct implication on IRPC’s cost of production and therefore its revenue and profits. In the second half of 2021, the world’s economic growth began to pick up as major cities around the world reopened for business. The commodity-petroleum product spread widened significantly compared to the previous year, pointing to a positive outlook. IRPC has undertaken the following risk management approach to cushion impacts: 1) Procured new crude oil types for use as feedstock for production, thereby improving the flexibility to choose from a range of crude oil to lessen impact from price volatility in any circumstance 2) Closely monitored and analyzed crude oil price movements triggered by events around the world, conducted price projections, reported to the management to keep them informed on a bi-weekly basis, or called an urgent meeting as needed to ensure effective response in a timely manner 3) Managed inventory of crude oil, petroleum, and petrochemical products at optimal levels to prevent impact from Stock Loss 4) Entered into derivative contracts with set targets on price, volume, and timeframe for risk management 102 IRPC PUBLIC COMPANY LIMITED 56-1 ONE REPORT 2021
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