Border Reopening and the Financial Impact of Informal Fuel Trade on Legal Petrol Stations in Thailand
Article Sidebar
Main Article Content
บทคัดย่อ
This study investigates the financial impact of informal cross-border fuel trade on legally registered petrol stations in Narathiwat, one of Thailand’s southern border provinces. Legal small and medium enterprises (SMEs) in this region operate under persistent pressure from untaxed and unregulated fuel smuggling, which distorts market competitiveness and erodes profitability. Using audited financial statements from 14 stations between 2019 and 2023, the study evaluates four key performance indicators: gross profit margin (GPM), net profit margin (NPM), return on assets (ROA), and return on equity (ROE). The COVID-19 border closures provided a quasi-natural experiment, temporarily suppressing smuggling and allowing observation of firm performance without informal competition. Descriptive results show modest improvements in profitability during the closure period and renewed decline after reopening. Inferential tests, however, revealed no statistically significant differences across periods, highlighting that observed trends were directional rather than conclusive. The findings contribute new firm-level evidence to debates on the informal economy, showing both the vulnerability and heterogeneity of legal SMEs in border regions. Policy implications include the need for targeted SME support, fuel price alignment in border provinces, and stronger institutional mechanisms to reduce reliance on temporary enforcement measures.
Article Details
อนุญาตภายใต้เงื่อนไข Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
เอกสารอ้างอิง
Al Muzayen, S., Mohamed, S. and Othman, U. S. (2024). Diesel subsidy reform fuel search trends Garasi Bernama. Retrieved January 9, 2025, from https://garasi.bernama.com/stories/diesel-subsidy-reform-fuel-search-trends
Aziani, A., Jofre, M. and Mancuso, M. (2025). Convergence between migrant smuggling and trafficking of goods: Text analysis of open-surce data. International Migration Review, 59(3), 1259-1292.
Cortez, L. E. Á., Zúñiga, C. P. C. and Martínez, R. C. J. (2021). Multi-criteria method for evaluating the impact of informal trade on the Mariscal de Puyo market. In J. Kacprzyk (Eds.), Studies in Computational Intelligence (pp. 3–14). Cham: Springer.
Dadpay, A. (2020). An analysis of fuel smuggling in the middle east as a single multinational market. Journal of Industry, Competition and Trade, 20(4), 643-656.
Department of Business Development. (2022). Data warehouse: Business information database. Ministry of Commerce, Thailand. Retrieved January 9, 2025, from https://datawarehouse.dbd.go.th/index
Shaik, M. E. and Ahmed, S. (2022). An overview of the impact of COVID-19 on road traffic safety and travel behavior. Transportation Engineering, 9, 100119.
Feshina, I. O., Feshina, S. S. and Nikolaev, D. A. (2021). Towards a sustainable model for regulating the domestic motor fuels market. In In J. Kacprzyk (Eds.), International Scientific and Practical Forum on Industry Competitiveness: Digitalization, Management, and Integration (ISCI 2019). (pp. 741–750). Cham: Springer.
Gu, Y., Wiedemann, M., Freestone, R., Rothe, H. and Stevens, N. (2024). The impacts of shock events on airport management and operations: A systematic literature review. Transportation Research Interdisciplinary Perspectives, 27, 101182.
Harun, M., Mat, S. H. C., Fadzim, W. R., Khan, S. J. M. and Noor, M. S. Z. (2018). The effects of fuel subsidy removal on input costs of productions: Leontief input-output price model. International Journal of Supply Chain Management, 7(5), 529–534.
Hierro-Recio, L. Á., Atienza-Montero, P., Varo-Morales, M. and Garzón-Gordón, A. J. (2020). Determinants of fuel prices: Dominant firms, local monopolies and ‘captive’ demand. Regional Studies, Regional Science, 7(1), 394–411.
Ismail, S., Lim, F. P., Lau, G. C. and Yow, K. S. (2024). A flexible model for fuel subsidy reform in Malaysia. ASM Science Journal, 19, 1-7.
Jardón, C., Martínez-Cobas, X., Trillo-Santamaría, J.-M. and Paül, V. (2025). COVID effect on sales, size, and industry in the Minho border area. Tijdschrift voor Economische en Sociale Geografie, 116(3), 320–334.
Jog, C. and Roach, T. (2022). How have COVID-19 case rates impacted retail gasoline price markups? Evidence from daily prices and transportation choices. Energy Research Letters, 3(1).
Jofre-Campuzano, P. and Coenders, G. (2022). Compositional classification of financial statement profiles: The weighted case. Journal of Risk and Financial Management, 15(12), 546.
Joshaghani, H., Morovati, M., Moshiri, S. and Rafizadeh, N. (2024). The effects of fuel subsidies on regional income distribution through smuggling. Journal of Regional Science, 64(5), 1596-1621.
Khaled, A. S. D., Alshaketheep, K. I., Tabash, M. I., Khan, M. A. and Al-Omari, M. A. (2021). Impact of COVID-19 on unorganized Indian retail markets. Innovative Marketing, 17(3), 99–108.
Kluser, F. (2025). Cross-border shopping: Evidence from household transaction records. Swiss Journal of Economics and Statistics, 161, 9.
Majumdar, S. B., Chatterjee, S., Das, J. K. and Gupta, S. D. (2024). Evaluation of performance of the Indian power sector from the lens of ratio analysis. International Journal of Business and Globalisation, 38(4), 591–609.
Michel, E., Manatschal, A. and Green, E. G. T. (2024). Explaining support for border closures during the COVID-19 pandemic: Exposure, political attitudes, or pandemic policy feedback?. International Journal of Public Opinion Research, 36(3), edae036.
Patlasov, O. Y. and Konyukova, O. G. (2023). Model for assessing the financial position of oil and gas companies. Journal of Siberian Federal University - Humanities and Social Sciences, 16(3), 391–404.
Piperopoulos, P., Kafouros, M., Aliyev, M., Liu, E. Y. and Au, A. (2021). How does informal entrepreneurship influence the performance of small formal firms? A cross-country institutional perspective. Entrepreneurship and Regional Development, 33(7-8), 668–687.
Rahim, N. A., Yusoff, Y. S. and Ibrahim, M. S. (2020). The effects of fuel price fluctuation on household income in Malaysia. Malaysian Journal of Mathematical Sciences, 14, 123–137.
Rattanawiboonsom, V. (2021). Dynamics of commercial banking services through supply chain management in Thailand during a pandemic situation: An analysis. Academy of Entrepreneurship Journal, 27, 1-10.
Romsom, E. (2022). Global oil theft: Impact and policy. Helsinki: UNU-WIDER.
Sripriya, S. and Devi, S. R. (2024). Evaluating the efficiency of selected sugar enterprises in Tamil Nadu: An empirical study. Finance India, 38(4), 795–812.
Stasinopoulos, D., Goula, A., Kastanioti, C., Sarris, M. and Soulis, S. (2023). Shadow economy in physicians’ sector: The physicians’ point of view from Greece. Journal of Health Management, 25(3), 672–685.
The Star. (2024, June 30). 90% of vehicles seized in Kelantan modified for fuel smuggling. The Star. Retrieved January 9, 2025, from https://www.thestar.com.my/news/nation/2024/06/30/90-of-vehicles-seized-in-kelantan-modified-for-fuel-smuggling
Timlen, T. (2023). Smugglers ahoy! Fuel smuggling remains a persistent problem in Southeast Asia. Bunkerspot, 20(1), 98–99.
Zulkifli, N., Mustapha, S. Z., Johari, N. F., Hassan, M. S., Yaacob, N. and Noor, N. R. A. M. (2024). Global Smuggling Research Trends: A Bibliometric Analysis of an Untold Story. In Board Diversity and Corporate Governance (pp. 653-661). Cham: Springer Nature Switzerland.
