Energy minister sees slim chance of Thailand’s oil prices falling

Oil prices at gas stations in Thailand are unlikely to drop, although global oil prices are declining because the government has to support the Oil Fuel Fund, which will have incurred about 100 billion baht in debt by the end of the year due to the oil price subsidy program, according to Finance Minister Arkhom Termpittayapaisith.

He said that the government is, however, ready to roll out measures to help ease the burden of certain groups hardest hit by rising oil prices.

According to the Thai Ministry of Energy, the average diesel price in Thailand is 34.94 baht/litre, which is the third lowest among the ten ASEAN member countries. Only in Malaysia and Brunei, both oil exporting countries, have lower diesel prices than those in Thailand (17.31 baht/litre in Malaysia and 7.91 baht/litre in Brunei). The highest price is in Singapore at 80.1 baht/litre.

The retail price of petrol (benzine) in Thailand is 44.55 baht/litre, the third lowest in ASEAN, after Malaysia’s 16.51 baht/litre and Brunei’s 13.52 baht/litre. The highest is in Singapore, at 97.95 baht/litre.

Meanwhile, the Public Debt Management Office has invited representatives of the Oil Fuel Fund for a discussion about the Fund’s debt, which is forecast to balloon to 200 billion baht by the end of the year if the government continues to use the Fund to subsidise some oil, such as diesel, which is mostly used in the transport sector.

Kla party leader and former finance minister Korn Chatikavanij has suggested that the gross refining margin (GRM), charged by oil refineries, should not exceed two baht per litre, adding that a reduction of the GRM could reduce the retail prices of oil products and ease the burden on the Oil Fuel Fund.

Energy Ministry Spokesperson Sompop Pattanaariyangkul said that the GRM should not be calculated from a single oil product, because gas stations are selling several such products whose prices fluctuate in tandem with global oil prices.

He maintains that the GRM charged by oil refineries is within the limits set by the government.


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