The Oil Fuel Fund Management Committee has announced a significant reduction in retail diesel prices of 2.14 baht per litre, effective March 9, following a historic restructuring of the refinery margin formula.
Energy Minister Akanat Promphan, chairman of the committee, revealed on Wednesday that they had approved a 2-baht-per-liter reduction in refinery gate prices for Diesel B7 and B20.
Such a move, described as a first in Thai history, utilises a new reference formula based on the Singapore market price.
Starting April 9, retail pump prices will drop to 48.40 baht per litre for Diesel B7 and 43.40 baht per litre for Diesel B20.
The decision comes as global oil prices show a downward trend.
Market prices dropped from their high of US$293 per barrel on April 2 to around US$255 per barrel on April 7.
In response, the committee also moved to reduce the Oil Fuel Fund's subsidy rates. The subsidy on Diesel B7 has been lowered from 18.54 baht to 15.00 baht per litre, while B20 saw a reduction from 20.09 baht to 17.03 baht.
Despite the price drop at the pumps, the financial health of the Oil Fuel Fund remains critical.
As of today, the fund is 57.76 billion baht in the red. This deficit is split between the oil account, which is 20.25 billion baht in debt, and the LPG account, which faces a loss of 37.51 billion baht.
The adjustment in subsidies is expected to improve the fund's liquidity by reducing its daily expenditure by approximately 288.44 million baht to 1.24 billion baht.
Akanat expressed gratitude to the public for their understanding over the global energy crisis and thanked oil refineries for their cooperation in the new pricing strategy.
"The collaboration of all parties does not only help reduce the impact on the cost of living but serves as a vital driver to keep the Thai economy moving forward amidst global volatility," he said.
