BANGKOK, THAILAND – Thailand’s new energy minister Akanat Promphan moved to quickly tackle rising energy costs with plans targeting fuel prices, electricity tariffs and structural reforms in the power sector.
Fast start after cabinet swearing-in
Newly appointed Energy Minister Akanat Promphan announced on 2 April that he intended to act immediately after the cabinet’s swearing-in and the government’s policy statement.
A morning meeting of the Energy Policy Administration Committee was scheduled for 7 April to decide short-term relief measures for households.
Oil prices: pressure starts at the refinery
According to Akanat, the pressure on consumers did not stem only from pump prices but mainly from ex-refinery prices, which were currently linked 100% to the Singapore benchmark.
This linkage made prices particularly volatile during periods of global turbulence and further pushed up costs in Thailand.
Refinery margins show “abnormal” spikes
Refinery gross margins usually stood at around 2 to 3 Baht per liter, but in March they averaged about 7 Baht, according to the minister.
At the beginning of April they had even climbed to nearly 14 Baht per liter, which Akanat described as a panic-driven market reaction linked to tensions in the Middle East.
New pricing formula and cap under fuel shortage law
The government planned to use its powers under the Fuel Shortage Prevention Act to review the formula for refinery gate prices.
Dubai crude prices would also be incorporated into the calculation in order to limit refinery margins to about 3 to 4 Baht per liter.
Pre-Songkran goal: relief beyond subsidies
With the planned cap, the government aimed to lower retail fuel prices without relying solely on subsidies from the Oil Fuel Fund.
Akanat said the measure should, if possible, take effect before the Songkran holidays.
More transparency to curb hoarding and smuggling
Akanat also highlighted greater transparency in the oil trade as crucial, noting that stock reports from the Department of Energy Business had so far been based on monthly figures, leaving room for irregularities.
Prime Minister Anutin Charnvirakul had already ordered daily reports on inflows and outflows of oil stocks to curb hoarding, speculation and smuggling to neighboring countries.
Electricity tariff: 3.88 Baht per unit
For electricity, Akanat wanted to keep the tariff at 3.88 Baht per unit instead of allowing it to rise to 3.95 Baht in the billing period from May to August 2026.
The Energy Regulatory Commission had approved the 3.95 Baht rate on 1 April, using so-called clawback funds to cushion the increase.
Reviewing investment plans at EGAT, MEA and PEA
To maintain a stable tariff, the investment planning of the three state utilities EGAT, MEA and PEA would be reviewed through the National Energy Policy Council chaired by the prime minister.
According to Akanat, more than 9 billion Baht in surplus investment budgets or clawback funds could be used to delay an increase in power prices.
More progressive tariff and savings incentives
The minister also signaled plans to adjust the tariff structure itself and introduce a more progressive pricing system to encourage electricity savings.
In such a model, low-consumption households could potentially pay on average no more than 3 Baht per unit.
Power market reform: moving away from single-buyer model
Beyond short-term relief, Akanat outlined a restructuring of the power sector away from the current single-buyer model, under which EGAT effectively acted as the sole buyer and seller.
Instead, a Direct PPA system was to be created, allowing especially industrial customers to purchase electricity directly from generators and boosting competition.
Direct PPAs and rooftop solar support
Akanat stressed that a Direct PPA approach could also better meet demand from data centers, and said the regulator had already consulted on pilot rules for Direct PPAs specifically for these facilities.
He also promised stronger support for rooftop solar through a net billing system, under which households could sell electricity to the grid at a fairer rate, complemented by demand-response measures to better manage consumption by time of day.