BusinessEnergy Ministry Plans Overhaul of Oil Pricing System

Energy Ministry Plans Overhaul of Oil Pricing System

The Energy Ministry is in the process of devising a new oil pricing structure to enable the government to set local oil prices independently of global market shifts, marking a significant departure from the longstanding system in place for over five decades.

Energy Minister Pirapan Salirathavibhaga highlighted the pressing need for change, citing inherent flaws in the existing pricing framework and its failure to adequately serve the public. He also pointed to the escalating retail diesel prices, driven by mounting excise taxes determined by the Oil Fuel Fund Committee.

The proposed overhaul, according to Pirapan, aims to instill greater transparency and government oversight by mandating oil distributors to disclose their costs to the National Energy Policy Committee. However, he emphasized the importance of a gradual transition to the new system to ensure stability and equity.

In a related development, the Land Transport Association of Thailand (LTAT) is seeking an audience with Prime Minister Srettha Thavisin to address transport fees in light of the recent one baht/litre hike in diesel prices.

Supasak Rungjerdfa, LTAT advisor, stressed the urgency of clarifying whether further price increases are imminent and their potential impact on truck operators’ operational costs. Failure to receive a response within a week will prompt the association’s members to convene and strategize their next steps.

Supasak underscored the financial strain on truck operators, noting that fuel costs, now comprising 55% of operating expenses, exceed sustainable levels. With approximately one million trucks in Thailand, operational capacity is expected to decline following the recent price hike, necessitating adjustments in transport fees to maintain viability.

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