Energy Minister Akanat Promphan, in his capacity as chairman of the Energy Policy Administration Committee (Epac), has ordered a reduction in diesel refining margins aimed at lowering retail fuel prices by about 2.14 baht per litre, with the measure expected to take effect on Thursday.
Mr Akanat said on Tuesday after an Epac meeting that discussions had been held with domestic refinery operators, resulting in a resolution to cut refinery gate prices for B7 and B20 diesel by 2 baht per litre.
The price adjustment is being based on Singapore market reference prices. The decision will be expedited for publication in the Royal Gazette.
The Oil Fuel Fund Management Committee is scheduled to meet on Wednesday to announce a new retail diesel price as quickly as possible.The total reduction, including tax adjustments, is expected to reach about 2.14 baht per litre, said the minister.
“The decision to cut the refining margin by 2 baht was based on data from March, when refining margins surged to as high as 7 baht per litre, compared with the normal range of 2–4 baht,” he said.
Mr Akanat stressed that the measure would not immediately push refineries into losses, as rising fuel demand continues to support profitability, although margins may narrow.
He expressed appreciation to refinery operators for their cooperation, noting that some had agreed to implement the measure immediately.
Epac is to ensure that the policy does not lead to fuel shortages or disrupt refineries’ ability to import crude oil, he said.
The move is enabled under the 1973 emergency decree on preventing fuel shortages, which grants Epac authority to set refinery gate prices. This marks the first time such powers have been used in Thailand to directly influence refinery pricing in order to ease the burden on consumers.
Authorities will continue to assess whether the full reduction should be passed on to consumers or partly used to ease the burden on the Oil Fuel Fund. Further discussions are expected in mid-April to consider whether deeper cuts of 2–5 baht per litre may be appropriate, depending on energy price trends.
Regarding the idea of seeking financial contributions from the private sector, similar to measures implemented in 2022, Mr Akanat said Thailand should avoid being viewed as a failed state reliant on donations.
However, he remarked companies willing to assist the government as part of their social responsibility are welcome, though he preferred not to label such assistance as “donations”.
Once the reduction is published in the Royal Gazette, all fuel distributed domestically must comply, with penalties including imprisonment for violations, he said.
The minister assured authorities remain open to discussions with operators should problems arise following the initial reduction.
He said it would be inappropriate for companies willing to contribute to bear the burden on behalf of those unwilling to do so, stressing that the current measure ensures shared responsibility across the sector while taking into account the financial capacity of refineries to sustain crude procurement.
Last week, Mr Akanat said he planned to cap refinery margins at 3-4 baht per litre in a bid to curb rising fuel costs without relying on subsidies.
He said the ministry wold use the powers available under the 1973 executive decree on fuel shortages to review the pricing formula and consider Dubai crude prices.
