BANGKOK, THAILAND – Thailand’s energy minister ordered a mandatory refinery price cut for key diesel grades to bring down pump prices nationwide.
Refinery margins at record levels
Energy Minister Eknat Promphan ordered on 7 April that the ex-refinery price for diesel grades B7 and B20 be reduced by 2 baht per liter. Pump prices could fall by up to 2.14 baht per liter as a result, according to the ministry.
All six refineries in the country were required to comply with the directive. Operators that refused faced the prospect of fines and prison terms.
The move did not come as a surprise. Eknat had previously highlighted what he described as unusually high refinery margins that, in his view, could not be explained solely by higher crude oil prices.
Thailand’s ex-refinery pricing system was linked to product prices in Singapore, which had shown strong volatility. This linkage was central to recent swings in domestic refinery margins.
Over the past four to five years, margins had generally been in the range of two to three baht per liter, according to the minister. In March 2026, the average jumped to seven baht per liter.
In the first six days of April, margins were even higher, fluctuating between 16 and 17 baht per liter. These levels prompted the ministry to act.
Decision inside the Energy Ministry
On 7 April, Eknat convened a meeting of the Energy Policy Administration Committee (Kor.Bor.Ngor.). The committee resolved to cut the ex-refinery price for B7 and B20 by two baht per liter.
Because the retail price was composed of refinery price plus taxes, the impact at the pump could be slightly higher. The ministry calculated a potential reduction of 2 baht and 14 satang per liter.
According to the minister, B20 might see a larger price drop than B7 because it was used more frequently. The ministry scheduled another meeting for 8 April to decide the new pump prices.
Eknat left open whether the revised prices would be announced before 9 April. He said the ministry would attempt to meet that timeline.
Mandatory measure, not a request
Eknat underlined that the decision was not voluntary for the industry. He stressed that refineries were legally obliged to implement resolutions adopted by the competent committee.
Every liter of B7 and B20 sold from all refineries in Thailand had to be two baht cheaper, he said. The measure applied across the board without exceptions.
Companies that failed to comply faced sanctions under the 1973 Emergency Decree on the Amendment and Prevention of Fuel Shortages. Penalties included both fines and imprisonment.
The Council of State had already been consulted on the legal basis. Eknat stated that the legal framework supporting the order was clear.
No public funds for excess refinery profits
The minister also drew a line around the role of the state Oil Fuel Fund, which currently subsidized end-user prices. He insisted that public money must not be used to support inflated refinery earnings.
“State funds should relieve the population – not secure industry margins,”
said Eknat, energy minister.
The Energy Ministry therefore requested full cost data from all refineries. It aimed to determine whether the high margins were justified by traceable additional costs such as surcharges, insurance or transport.
If the analysis showed that windfall profits were being made, refineries would be required to channel these gains back into the system. This would be done on the basis of orders, not on a voluntary basis.
Smuggling and stockpiling in focus
Lower domestic prices could create an incentive to smuggle fuel abroad. Eknat announced a firm response to such activities.
Inspection teams known as “Team Sud Soi” would be deployed to carry out checks. At the same time, the ministry planned to prohibit the hoarding of fuel.
The government aimed to push through the fuel price reduction before the Songkran festival, which begins in mid-April. Eknat justified the tough stance by arguing that the country was not in a normal situation.
He said that usual pricing mechanisms were no longer sufficient under current conditions. The intervention was presented as an exceptional response to an exceptional market environment.