Akanat says falling global oil prices open way for pump price cuts

Energy Minister Akanat Promphan says falling global oil prices have created room for further cuts in Thai pump prices during Songkran, while the government also moves to strengthen crude supply security and review whether extraordinary borrowing support for the Oil Fuel Fund is still needed.

Speaking at Government House on Friday, April 11, Akanat said refined oil prices in the Singapore market, particularly diesel, had continued to decline sharply, opening the way for immediate reductions at filling stations. Thailand had already approved cuts of up to 6 baht per litre on selected diesel and gasohol products from April 11, after world market prices eased further.

According to the ministry, world oil prices fell from around US$255 per barrel on April 7 to about US$211 per barrel on April 9. Earlier in the week, officials had also cited a decline from around US$293 per barrel on April 2, helping to ease pressure on both retail prices and the Oil Fuel Fund.

Akanat said that during the long holiday period from April 10-16, he would continue closely monitoring two main tasks: ensuring there is enough oil to meet domestic demand, and accelerating efforts to build up crude reserves inside the country in case unrest abroad worsens further.

For April and May, he said, import arrangements were already close to being fully confirmed, while orders for June were still being processed. Even so, he warned that global conditions remain uncertain and that competition for crude cargoes at sea could intensify if buyers begin paying extra war premiums to secure supply.

To prepare for that risk, the Energy Ministry has also held discussions with the Foreign Ministry on the possible use of government-to-government channels to procure crude oil if necessary. The aim, he said, would be to secure suitable grades of crude for Thailand’s domestic refining system.

On the Oil Fuel Fund, Akanat said the fund remains nearly THB60 billion in deficit, but the situation has improved noticeably. Official data showed the fund’s overall deficit at more than THB57.76 billion as of April 8, after previously standing at THB53.226 billion on April 5.

He said the fund’s daily losses, which had once reached as much as THB2.5 billion, had now fallen to the hundreds of millions of baht a day. On April 10, the latest fuel price adjustments would reduce daily Oil Fuel Fund outlays to about THB589.15 million, down from more than THB1.2 billion previously.

Because of that improvement, Akanat said he had discussed the matter with the Finance Ministry and believed there may be no immediate need to issue an emergency decree guaranteeing new borrowing for the fund. If the fund can still manage its liquidity and secure financing on its own, he said, the decree can be delayed for now, though the government is keeping the option ready in case conditions worsen.

He also said the ministry was preparing talks with refiners to seek cooperation in lowering ex-refinery prices, as part of a wider effort to show burden-sharing and ease living costs for the public. Officials are now checking the operators’ actual cost figures and comparing them with refinery margin estimates recorded in March before deciding on the next pricing approach.

That follows the government’s earlier move to force a 2-baht-per-litre cut in ex-refinery diesel prices, using emergency powers for the first time to apply a Singapore-minus pricing formula in response to what officials described as excessive refinery margins.

Taken together, the latest moves suggest the Energy Ministry is trying to do two things at once: pass through some relief to consumers while world prices soften, and build a bigger buffer against the risk of a renewed supply shock if the Middle East crisis escalates again.