Mon, June 27, 2022

business

Minister expects deal on voluntary contributions from refineries to oil fund


Deputy Prime Minister and Energy Minister Supattanapong Punmeechaow said on Wednesday that he expected a deal this week with oil refineries for them to contribute voluntarily to the Oil Fuel Fund.

Supattanapong said his ministry has started talking to the refineries to encourage them to contribute a part of their gross refining margin to the oil fund for at least three months so that the fund would be able to subsidise diesel oil price.

“I expect a deal will be wrapped up this week,” the energy minister said.

He said the amount might be 7 billion or 8 billion baht but the ministry would have to first to reach an agreement with the refineries.

“Don’t press me now. I still need time to consult all sides for a suitable figure that will be acceptable to both sides. I can’t say now whether it will be more or less than the figure.”

He said the ministry would have to convince the refineries to voluntarily cooperate with the plan before the ministry studies the law to enable contributions from the refining margin.

“The government does not want to force the refineries, but we will seek cooperation,” the energy minster added.

Responding to the proposal by Kla Party leader chief Korn Chatikavanij for the Energy Ministry to enact a law forcing the refineries to contribute from their margin to the oil fund, Supattanapong said the ongoing talks were based on voluntary contributions so he did not want to set a condition that would bog down the talks.

“We’ll wait for the results of the talks that will come out this week,” the minister said.

Kulit Sombatsiri, permanent secretary at the Energy Ministry, said although the ministry has the power to order the refineries to reduce the refining margin to help bring down oil prices, there could be lawsuits in the future.

He said such an order could affect the shareholders of the refineries and could violate the Stock Exchange of Thailand (SET) law.

Earlier, Korn floated his idea for the government to order the refineries to lower refining margin, as they were making huge profits. He even suggested that the government slap a windfall tax on the refineries.

The Petroleum Refining Industry Club on Monday dismissed as untrue a claim by Korn that Thai refineries were enjoying a high margin of over 8 baht per litre of oil, saying they had to shoulder several costs.

During the past week, the share prices of refineries traded in the SET fell by about 13.3 per cent on average, causing their market capitalisation to evaporate by 76.8 billion baht.

Published : June 22, 2022

By : THE NATION