BANGKOK, THAILAND – Thailand’s Energy Ministry warned of one of the worst energy crises in the country’s history after a sharp surge in global diesel prices put heavy pressure on consumers and the state-backed Oil Fuel Fund.
Diesel price shock on the global market
According to the Energy Ministry, the global diesel price rose from a typical level of 92 US dollars (2,997 baht) to more than 250 US dollars per barrel. Officials said this spike clearly exceeded the previous peak during the Russia-Ukraine war.
During that conflict, the price had reached about 150 US dollars per barrel, according to the ministry. The latest jump therefore marked a new and significantly higher benchmark for Thailand’s fuel import costs.
Ministry describes a historic crisis
The permanent secretary of the Energy Ministry, Prasert Sinsukprasert, described the situation as one of the most serious crises in Thailand’s history.
“This is one of the most severe crises in Thailand’s history.”
said Prasert Sinsukprasert, permanent secretary in the Energy Ministry.
He called for joint efforts across all sectors, from government and private businesses to refineries, fuel traders, service operators and the general public.
“We need a collective effort from government, the private sector, refineries, fuel traders, service operators and the people.”
said Prasert Sinsukprasert, permanent secretary in the Energy Ministry.
Balancing market forces, the fund and citizens
Prasert said pricing decisions had to balance global market levels, the financial position of the Oil Fuel Fund and the impact on Thai citizens.
“We must find a balance between global market prices, the Oil Fuel Fund’s finances and the impact on the Thai people.”
said Prasert Sinsukprasert, permanent secretary in the Energy Ministry.
He added that the ministry worked to protect the public interest, including through the use of windfall gains to ease the burden. These gains were intended to cushion the shock of higher costs rather than to boost profits in the sector.
Oil Fuel Fund: Deep deficit and limited buffer
The rapid price increase pushed the Oil Fuel Fund into a deficit of nearly 50 billion baht, according to the ministry. Officials said the fund’s room to manoeuvre had narrowed sharply.
A credit line of 150 billion baht could support the fund for only about two more months. After that, the authorities would face tougher choices on either reducing subsidies or allowing sharper price rises.
Why domestic fuel prices rose repeatedly
The recent successive increases in domestic fuel prices were intended to safeguard the fund’s liquidity. The ministry said this step also aimed to prevent sudden price jumps at the pump.
Such abrupt jumps could, in its assessment, trigger panic buying or encourage illegal exports. Gradual adjustments were therefore seen as a way to manage both market behaviour and supply stability.
LPG remains subsidised
The Oil Fuel Fund continued to subsidise liquefied petroleum gas (LPG) at around 30 million baht per day. This spending remained a central element of the government’s relief measures despite the fund’s strained finances.
By keeping LPG prices in check, the authorities sought to support households and small businesses that depended on the fuel. The ongoing subsidy underscored the political and social sensitivity of energy costs.
Refineries, processing costs and “war premiums”
On refinery price structures, Prasert said operators had to accept the risks associated with their business. He stressed that refinery fees were not pure profit but covered fixed costs such as energy and wages.
However, he noted that a recent rise in so-called war premiums had generated windfall gains. In response, the Energy Policy and Planning Office was driving a shift to a five-year average refinery fee of 2.43 baht per litre.
“Because of the increase in so-called war premiums, windfall gains have emerged, so the Energy Policy and Planning Office is pushing for a five-year average refinery fee of 2.43 baht per litre.”
said Prasert Sinsukprasert, permanent secretary in the Energy Ministry.