Bangkok: Ekanat Promphan, the Energy Minister, has pledged to maintain fuel prices in Thailand under the 35 baht mark, countering global market trends that threaten to drive costs higher. The commitment comes despite the potential for significant financial losses, with the Oil Fund already facing a deficit exceeding 58 billion baht.
According to Thai News Agency, Ekanat confirmed that the government will utilize refinery funds and the Oil Fund to stabilize oil prices, mitigating sharp price surges even as actual costs rise. With global oil prices climbing due to escalating tensions in the Middle East, the minister emphasized the importance of these mechanisms in shielding consumers from dramatic price fluctuations.
Ekanat elaborated on the strategy, stating that the reduction of refinery prices remains instrumental in keeping gas station prices stable. This approach, along with daily monitoring by the Ministry of Energy, aims to prevent rapid and steep increases in domestic prices. Despite the global price hikes, Ekanat assured that Thailand would not experience oil shortages, maintaining price control through market mechanisms.
Highlighting past practices, Ekanat noted that reliance on Singapore's pricing was not constant, as Thailand leveraged refinery funds to lower costs. He recalled implementing similar strategies during the Emergency Decree on Amending and Preventing Fuel Shortages. Currently, 10.5 billion baht from these funds is being used to subsidize fuel prices at gas stations, a measure actively in place to ease consumer burdens.
Reporters indicate that the ongoing Middle East tensions are likely to further elevate Thailand's oil import costs. As of July 14th, the reference Singapore oil price surged, with diesel prices nearing $154 per barrel and gasoline prices almost $112 per barrel. Despite these increases, Thailand's prices remain capped due to the Energy Policy Administration Committee's directive, which limits "gasohol and diesel" prices to no more than 35 baht per liter. This policy has necessitated increased retail subsidies, pushing actual prices beyond the cap, thus exacerbating the Oil Fund's deficit.
The Oil Fund's subsidies cover various fuels, with compensations adjusted as follows: Diesel B7's compensation increased by 1.01 baht to 4.06 baht/liter; Diesel B20 saw an increase of 0.76 baht to 9.17 baht/liter; Gasoline contributions reduced by 0.82 baht to 7.24 baht; Gasohol 95/91 contributions decreased by 0.71 baht to a compensation of 0.23 baht; Gasohol E20's compensation rose by 0.51 baht to 4.16 baht; and Gasohol E85's compensation increased by 0.22 baht to 4.85 baht/liter.