Thailand removes assumed fuel costs, cutting refinery-gate prices from October 29

Thailand will introduce a new refinery-gate fuel-pricing formula on Thursday (October 29), removing costs that Energy Minister Akanat Promphan says have not actually been incurred and reducing the pricing burden by an estimated THB10.84 billion a year.

Akanat said the revised calculation would apply to all fuel products and remove assumed costs that have been included in Thailand’s pricing structure since 2004, when the Energy Policy and Planning Office (EPPO) established the formula.

Thai refinery-gate prices have traditionally been based on refined-product prices in Singapore, with additional costs calculated as if the fuel had been shipped from Singapore to Thailand, even though most of the fuel concerned is refined domestically.

Under the new criteria approved by the Committee on Energy Policy Administration (CEPA), assumed freight, insurance and transportation-loss costs based on the Singapore route will be removed.

The allowance for oil reserves will also be reduced to two-thirds of its previous level to more closely reflect actual reserve requirements.

Refinery-gate prices to fall by up to THB0.3548 a litre

The changes will reduce refinery-gate prices by between THB0.0875 and THB0.3548 a litre, equivalent to savings of about THB29.7 million a day or THB10.839 billion a year.

B7 diesel, the most widely consumed fuel covered by the calculation, will see the largest reduction at THB0.3548 a litre, representing an estimated THB6.795 billion in annual savings.

Gasohol 95 will see a reduction of THB0.3203 a litre, equivalent to about THB2.115 billion a year.

Akanat said relying solely on global benchmark prices may be appropriate under normal market conditions, but argued that during a crisis the existing formula could generate excessive returns at the expense of consumers.

Government says earlier measures recovered THB31.8bn

Since April 2026, CEPA has used powers under the Emergency Decree on Remedy and Prevention of Shortage of Fuel Oil B.E. 2516 (1973) to adjust refinery-gate prices for high-speed diesel on eight occasions.

The government says those measures recovered THB31.786 billion in what it regarded as excess refinery benefits, covering 11.058 billion litres of diesel.

Combined with THB64.355 billion from the Oil Fuel Fund used to manage fuel prices, the government says a total of THB96.141 billion has been deployed to cushion energy costs for consumers.

Akanat described the earlier reductions in refinery margins as an emergency response, while the latest change was intended as a permanent structural reform.

“Removing excess refinery benefits was a short-term response to the crisis, while removing these assumed costs addresses the structure itself,” he said.

“Even after the crisis ends, this roughly THB10 billion a year will not return to Thai consumers’ fuel bills.”

Energy Ministry targets hidden costs

The minister said the fuel-pricing overhaul followed an earlier move to remove about THB18 billion in public-lighting costs from household electricity bills.

He said both measures were intended to review costs embedded in Thailand’s energy-pricing structures and prevent consumers from paying for expenses that did not reflect their actual use.

The new refinery-gate pricing formula takes effect on October 29.