Bangkok:Energy Minister Ekanat Promphan has announced the permanent removal of "ultimate costs" from Thailand's oil pricing structure, which will take effect tomorrow. This decision is expected to result in a reduction in the price of B7 diesel. The exact amount of the reduction will be determined during a meeting this evening.

According to Thai News Agency, the "ultimate costs" previously included transportation, insurance, losses, and oil reserves within the refining margin, significantly burdening the public with approximately 10 billion baht annually. These costs have accumulated to over 230 billion baht since their implementation in 2004. The removal of these costs aims to restore fairness to oil users and is expected to recover about 30 million baht per day. The Oil Fund will manage these funds to subsidize oil prices, particularly for B7 diesel.

The Ministry of Energy has emphasized that referencing refined oil prices from the Singapore market is unfair during a crisis, as Thailand has adequate refining capacity for domestic needs. Over the past six months, measures have been implemented to retrieve actual cost data and incorporate "excess benefits" from refining margins, recovering more than 33 billion baht from refinery groups. This has led to a reduction in the ex-refinery price of diesel by 2 to 5 baht per liter.

These structural changes are intended to provide a fair energy pricing system for the public, rather than temporary compensation. Concerns from analysts and foreign investors regarding price intervention have been addressed by clarifying that the revisions were a necessary adjustment of the pricing formula to reflect true costs.

Additionally, the government is promoting alternative fuels like E20 and B20, which are significantly cheaper. Current B20 usage has reached about 6 million liters per day. Efforts are underway to increase public awareness and the availability of alternative fuel dispensers to meet growing demand.