Thailand’s Energy Permanent Secretary Prasert Sinsukprasert is scheduled to hold a meeting with relevant agencies on Thursday to issue contingency plans to cope with fluctuations in global oil prices, in the light of the ongoing war between Israel and Hamas.

Prasert reportedly said he that is concerned that global oil prices will be affected if the war intensifies or drags on, as he urged the public to understand the situation and to use energy sparingly.

Meanwhile, Wattanapong Kurovat, director-general of the Office of Energy Policy and Planning, said that he expects global prices of crude oil to increase, but only for the short term, citing reports of possible peace negotiations between Israel and Hamas.

Crude oil prices have recently rebounded, after falling for several months due to concerns over higher interest rates which may impact demand.

The Office of Energy Policy and Planning earlier forecast that, during the second half of this year, the average crude oil price would be around US$87 per barrel, but there are clear signs now that the price will edge up to between US$91 and US$98/barrel, as winter in the northern hemisphere is approaching, compounded by reports that Saudi Arabia may extend its oil production cuts.

PTT, Thailand’s major oil importer and producer, estimates that the crude oil price may reach US$100/barrel by the end of the year.

Wattanapong said that the most worrisome aspect is the exchange rate, noting that for every one baht drop in the exchange rate, the prices of finished oil products in the country will increase by 0.70 baht/litre.

Meanwhile, an informed energy sector source said the contingency plan is divided into two areas, oil reserves and domestic oil prices.

There are currently crude oil reserves amounting to 3.91 billion litres in storage and 1.637 billion litres en route to Thailand. Finished oil products currently in reserve can last up to 20 days and there is a 21-day reserve of LPG.

The prices of diesel and cooking gas have been capped at 30 baht/litre and 423 baht per 15kg respectively until the end of December, using subsidies from the Oil Fuel Fund which is now running in the red to the tune of 23 billion baht for diesel and 45 billion baht for LPG.