BANGKOK, THAILAND – Thailand’s energy minister considered a second cut to refinery margins of more than 2 baht per litre this week to curb fuel prices, while the government intensified its fight against fuel smuggling and reported progress on a seized tanker in the Persian Gulf.
Second round of refinery margin cuts under consideration
Energy Minister Akanat Promphan indicated that a second reduction in refinery margins of more than 2 baht per litre could be implemented within the week. The ministry said the aim was to manage domestic fuel prices and ease living costs for households.
The first round of cuts had been introduced in March and reduced end-user prices by 2.14 baht per litre. The Energy Policy Administration Committee was scheduled to meet on Wednesday, with new rates potentially taking effect on Thursday.
Officials were analysing actual cost data in order to set a revised refinery margin. Between 1 and 15 April, the average margin rose to about 15 baht per litre, more than double the March average of just over 7 baht.
Recalculation after “highly irregular” margin jump
The minister described the sharp increase in margins in early April as “highly irregular” and announced a recalculation based on the real conditions in the first half of the month. Additional costs such as war risk premiums, transport and insurance were to be taken into account in the new formula.
Authorities expected the adjustment to deliver a reduction of more than 2 baht per litre. Critics had pointed to a roughly 20% drop in market prices in Singapore, while Thai retail prices had only eased slightly.
Responding to this criticism, Akanat referred to the state of the Oil Fund. He said the fund had played a major stabilising role when global prices were high and had accumulated debts of more than 60 billion baht.
According to the minister, price changes therefore had to be carried out step by step to safeguard stability. He said daily outflows from the Oil Fund had already fallen sharply.
Oil Fund pressures and cautious price strategy
The fund’s daily disbursements had dropped from more than 2 billion baht per day to about 100 million baht, the minister said. Nonetheless, he argued that this still required a cautious approach to further price reductions.
In a separate government communication, officials reported that the Thai Maritime Enforcement Command Centre had tightened enforcement against illegal activities in Thai waters. Government spokeswoman Rachada Dhnadirek said Prime Minister Anutin Charnvirakul had ordered more intensive operations targeting smuggling.
Smuggling raids uncover fuel and cannabis
From February to April, authorities seized more than 335,000 litres of illegal fuel and gasohol, over 1.2 tonnes of cannabis flowers and other illicit goods, according to the government. Investigators also detected irregularities in 20 oil deliveries, involving a combined loss of around 57 million litres.
Rachada said some vessels had switched off their automatic identification system (AIS) and conducted ship-to-ship transfers at sea to evade checks. The case was now being handled by the Department of Special Investigation (DSI), which was expected to pursue possible offences.
Hormuz incident: one SCG vessel cleared
Meanwhile, the Foreign Ministry reported progress regarding two Siam Cement Group (SCG) vessels that had been held in the Strait of Hormuz. One of the ships was allowed to depart safely after diplomatic coordination.
No further details were provided about the second vessel in the ministry’s statement. The authorities did not disclose the conditions under which the released ship was able to resume its voyage.