Bangkok: Energy Minister Ekanat Promphan has confirmed that oil prices will continue their downward trend following the recent agreement between the United States and Iran to end the ongoing conflict.
According to Thai News Agency, Ekanat emphasized the impact of this agreement on Thai oil prices, noting a gradual decrease in global oil prices. He conducts regular evening meetings focused on the Oil Fund to monitor the situation and adjust local pump prices as needed. Previously, the government employed refinery price reduction mechanisms, resulting in a significant financial impact of nearly 10 billion baht. With the current trend of lower prices, adjustments can now be made according to market conditions. Ekanat mentioned that they will keep a close watch on Singapore's market prices and expect the agreement to be finalized by Friday.
Ekanat highlighted that gasoline prices in Thailand have decreased from a peak of 50 baht per pump to around 38 baht since he assumed office, with expectations of further reductions. Addressing the Oil Fund's current deficit of 57 billion baht, he noted the potential necessity of borrowing additional funds. The previous strategy of reducing refinery gate prices instead of relying solely on the Oil Fund has alleviated the fund's burden by over 8 billion baht. Ekanat has ordered a review of the fund's figures, clarifying that the actual deficit has decreased from an initial estimate of over 60 billion baht to approximately 57 billion baht without increasing collections from oil to prevent financial strain.
Ekanat also mentioned ongoing investigations into groups of oil traders suspected of hoarding. The Oil Fund Committee has decided not to repay those under investigation until they are cleared of any wrongdoing. This situation involves a backlog of about 30 billion baht, negating the immediate need for a royal decree from the Ministry of Finance for borrowing. Alternative funding sources will be explored to avoid burdening the Ministry or increasing public debt unnecessarily. Refinery and oil trader collaborations will be prioritized to manage the situation, with an emphasis on maintaining consistent approaches and not halting progress midway. Temporary powers previously used under emergency decrees during national shortages will inform the establishment of a permanent mechanism for managing refinery gate prices and refining margins. These mechanisms will help limit excessive refining margin increases during crises like the Middle East conflict, ensuring a stable oil price structure. Any necessary legal amendm ents will be pursued, with relevant agencies exercising their authority as required.