Energy panel cuts ex-refinery oil prices by Bt5/l from tomorrow

The National Energy Policy Committee (NEPC) resolved today to cut the ex-refinery prices of refined oil products from six refiners by five, instead of two baht per litre from tomorrow until May 9, with another 3-baht cut following.

The price cut will, however, need to be announced in the Royal Gazette before it becomes effective.

Energy Minister Akanat Promphan made clear that the 5-baht cut does not necessarily mean that the prices of refined oil products at service stations will automatically reduce by the same amount.

He said that the prices at service stations could be reduced or the cut could be used to ease the debt burden of the Oil Fuel Fund which is, currently, carrying a loss of about 60 billion baht.

He warned that, if the Fund’s debt burden is not curbed sooner rather than later, consumers may have to pay more for oil products.

Akanat explained that the ex-refinery price cut is made possible because the Gross Refining Margin (GRM) for April averages 14 baht/litre, which is high, and the NEPC has discovered that the six oil refiners have gained a combined windfall of about 10 billion baht, including 5 billion baht in April alone.

The energy minister went on to say that, in the future, pump prices will not jump by 5 or 6 baht/litre at a time, as has been the case previously, but will increase gradually adding, however, that the Singapore oil price reference will still be used as a benchmark to determine domestic oil prices.

He disclosed that the Energy Ministry will seek consent from the government to secure a 20 billion baht loan to boost the financial standing of the Oil Fuel Fund, as he claimed that this loan is not related to the 500 billion baht loan that the government plans to negotiate from domestic sources.

The ministry envisages cutting the Fund’s losses, estimated at about 2.6 billion baht a day to a level of about 100 million baht a day, said the minister.