Democrat Party deputy leader Korn Chatikavanij has urged the government to investigate refinery profits rather than asking operators to donate excess earnings to help ease the economic burden from soaring energy costs.
In a Facebook post on Saturday, Mr Korn said the government should stop “timidly” seeking donations from oil refineries, but instead rely on its fact-finding panel to determine whether refinery margins are excessive.
Refining margins have at times surged to as high as 17 baht per litre, from 2-3 baht prior to the outbreak of war in the Middle East, he noted.
Thailand-based refiners have countered that the gross refining margin is not a profit margin. It includes many other cost factors, such as transport and insurance, that have been inflated because of the war.
If the fact-finding panel finds that refiners’ profits are indeed excessive, the government should clearly explain the findings and exercise its legal authority, rather than relying on voluntary cooperation without a legal basis, said Mr Korn, a former finance minister.
He added that refineries were publicly listed companies and must answer to shareholders. Any “informal arrangement” could expose executives to legal challenges, he said, stressing that good governance required the fair and lawful use of state power.
Lessons from 2022
Mr Korn also warned the government not to delay action to ease public pressure, recalling a similar approach that was used in 2022 after the Russian invasion of Ukraine sent prices soaring. He told Finance Minister Ekniti Nitithanprapas to study it.
At that time, he said, refineries agreed with the government to contribute about 8 billion baht a month for three months, totalling 24 billion baht. In practice, however, only a few hundred million baht was paid, not all companies participated, and payments were made for only a limited number of instalments before the issue faded from public attention, according to Mr Korn.
“Society never learned whether the (fuel) pricing structure was genuinely flawed, or how — a question that remains unanswered to this day,” he said.
Mr Korn cited the lessons from 2022 to caution Mr Ekniti against repeating a time-buying strategy after the latter instructed the Ministry of Energy to seek cooperation from refiners to channel excess refining profits during the crisis into the Oil Fuel Fund to help ease the public’s burden.
The fund’s deficit has soared to nearly 50 billion baht due to the high cost of subsidising local fuel prices since the Middle East war began.
Fund managers have had to scale back subsidies in order to preserve its financial stability, but this in turn pushes pump prices up even more — diesel prices were raised four times this week are are now 60% higher than they were on Feb 28.
Mr Ekniti, a deputy prime minister and finance minister, in his capacity as chairman of a committee studying the fuel pricing structure, said on Friday that the panel had resolved to adopt an approach similar to one called for in a June 2022 cabinet resolution, in order to provide swift relief to consumers.
Detailed figures on fuel pricing practices and any “unnecessary costs” would be submitted to the cabinet on Monday for urgent consideration, Mr Ekniti said.
