BANGKOK, THAILAND – Energy Minister Akanat Promphan ordered a steep reduction in refinery prices to ease Thailand’s fuel costs and the burden on consumers.
Sharp refinery price cut to ease pressure
Thailand’s Energy Minister Akanat Promphan forced refineries to reduce prices significantly. After an initial cut of two baht per liter, a further three baht reduction took effect immediately, giving motorists total relief of five baht per liter until early May.
The temporary price cap was set to cover all fuels until 9 May. The move was part of the government’s effort to curb surging pump prices and reduce the growing strain on households.
The decision followed an urgent meeting of the parliamentary energy committee in Bangkok. The ministry said it was responding to what it viewed as excessively high profit margins in the sector.
Officials stressed that people should not continue to bear the burden of what they described as overblown industry profits. The measure was designed as an immediate intervention while longer-term options were studied.
Refineries’ high profits under scrutiny
Investigations found that profit margins in early April had climbed to a striking 14 baht per liter. The Energy Ministry reviewed the actual transport and insurance costs of the country’s six major refinery operators.
Any margin deemed above a reasonable level was sharply reduced by the government. According to the ministry, this trimming of excess profits was central to the new pricing policy.
In total, around 10 billion baht were at stake in the adjustment. The authorities planned to use this sum to relieve price pressure on consumers at the pump.
Diesel had been a particular concern, as recent corporate profits on this fuel were considered far too high. The government framed its move as a correction of what it saw as disproportionate gains in that segment.
Two-pronged strategy against price shock
Whether pump prices would fall immediately depended on two key factors. One portion of the reclaimed refinery profits could flow directly to motorists through lower retail prices.
Another portion was earmarked for the state oil fund, which was already 60 billion baht in the red. Authorities said the fund’s deep deficit limited the scope for direct consumer subsidies.
Minister Akanat Promphan cautioned against allowing the debt to grow unchecked. He argued that if the state failed to stabilize the fund, future fuel prices could rise even more dramatically.
The government said it was seeking a stable, long-term solution rather than merely patching short-term gaps. Officials signaled that balancing immediate relief with fiscal responsibility was a central objective.
Singapore prices add international pressure
The global market situation remained tense and risky, according to the ministry. In Singapore, diesel prices had recently surged by three baht per liter, adding external pressure on Thailand’s pricing.
Thailand had so far not passed this increase on to domestic consumers. Officials portrayed this as a deliberate choice to shield the public from abrupt international price shocks.
The energy committee was scheduled to meet again in the evening to discuss exact pump prices. Members were closely monitoring developments in Singapore to avoid sudden, sharp adjustments.
The stated goal was to prevent abrupt hikes of five or six baht per liter in the future. Officials said smoothing out such jumps was key to protecting both household budgets and the wider economy.
Multi-billion loan planned to rescue oil fund
The government also planned to inject 20 billion baht into the oil fund. Minister Akanat said this financial support was intended to prevent the state from drifting toward insolvency.
He emphasized that the move would remain within legal borrowing limits. By doing so, the ministry aimed to avoid creating a new mountain of public debt for the years ahead.
At the same time, the ministry was negotiating with creditors to extend repayment periods. The aim was to reduce the fund’s daily losses from what were described as extreme amounts to a more manageable level.
Officials said these steps were designed to prepare Thailand more effectively for future crises in the energy market. The combination of tighter refinery margins, support for the oil fund, and creditor talks was presented as a package to strengthen long-term resilience.
“Do you believe the government can permanently stop the greed of the oil companies?”
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