Bangkok:Peerapan Salirathavipak, leader of the Ruam Thai Sang Chart Party and former Minister of Energy, has refuted claims that he was responsible for maintaining the practice of pegging Thailand's oil prices to Singapore's market prices during his tenure. He clarified that legal constraints prevented him from abolishing the system outright.
According to Thai News Agency, Peerapan highlighted that transitioning away from the Singapore benchmark requires comprehensive legislation and a well-structured replacement system. He was preparing an emergency decree to initiate this change, but governmental shifts halted progress. Peerapan noted that while transportation and insurance costs were removed from the pricing formula, this did not signify abandoning the Singapore price reference.
The current oil pricing mechanism, which has been in place for over 30 years, was rooted in a Cabinet resolution from 1991. Initially, Thailand used a government-controlled retail price system, which later transitioned to a floating price model based on Singapore's refined oil prices. Peerapan expressed that the rationale supporting this system is outdated given current economic conditions.
Peerapan explained that abolishing the existing system involves establishing transparent criteria and supporting legislation. This process is necessary to ensure fairness and avoid potential disputes in the oil industry. He was engaged in drafting a comprehensive law to regulate oil trading and pricing, which was to be presented as a Royal Decree. However, political changes in mid-2025, including a border conflict and a change in government, interrupted the process.
He emphasized the need for a permanent legal framework to regulate oil prices, separate from special measures used in crises. Despite suggestions to use the Emergency Decree on Amending and Preventing Fuel Shortages, Peerapan noted that the authority to invoke such measures is reserved for the Prime Minister, and no crisis warranted its use during his tenure.
Peerapan further explained that the current Minister of Energy's ability to adjust refinery pricing components was based on different legal circumstances. He highlighted the importance of distinguishing between adjusting pricing formula components and replacing the entire pricing system, asserting that the Singapore reference price remains in use.