The Thai government is preparing to purchase crude oil from Russia and is considering raising petrol prices once the diesel price cap expires on Monday. Officials have also moved to clarify concerns about rising refining margins.
Deputy Prime Minister Phiphat Ratchakitprakarn said the government’s immediate priority is to secure sufficient crude oil supplies if the war in the Middle East continues to disrupt global energy markets.
He said Thailand has already increased its crude oil reserves from 92 days to 98 days to strengthen national energy security.
About half of Thailand’s crude oil imports currently come from the Persian Gulf and pass through the Strait of Hormuz, while the remainder is sourced from other regions. The government is accelerating negotiations to increase imports from alternative suppliers to reduce the risk of supply disruption.
In another development, the United States has temporarily lifted sanctions on countries importing Russian crude oil for 30 days.
The decision applies to oil and petroleum products currently stranded at sea, estimated at about 100 million barrels — roughly equivalent to one day of global consumption.
In response, the Ministry of Energy is preparing to negotiate purchases of Russian crude to supplement Thailand’s supplies and ensure domestic energy security, Mr Phiphat said.
Sarawut Kaewtathip, director-general of the Department of Energy Business, said preliminary discussions indicate that Russian crude could be processed by Thai refineries.
Authorities will coordinate with refinery operators and traders capable of accessing Russian supplies, with any purchases likely benchmarked against the global Brent crude price.
The government is also reviewing fuel pricing ahead of the diesel price freeze expiring on Monday. Mr Phiphat said discussions will take place on adjusting diesel prices after the cap ends and increasing petrol prices in line with market mechanisms.
The cost of subsidising diesel to keep prices just below 30 baht per litre has reached 16 baht per litre, with the government’s Oil Fuel Fund spending more than 1 billion baht per day to maintain the subsidy.
If fuel prices rise at the pump next week, transport costs and the price of goods could increase. Authorities are therefore consulting with Prime Minister Anutin Charnvirakul and the Ministry of Commerce on possible measures to mitigate the impact.
Authorities are also preparing a plan to increase the biodiesel blending ratio from the current B7 level to B10, and potentially B20, as previously used.
Mr Phiphat said some support measures for industry may involve allowing fuel prices to partially float while requiring businesses to absorb part of the higher costs. However, the impact on consumers could be limited if sufficient funds remain in the Oil Fuel Fund to stabilise prices.
In a related development, the country’s petroleum refiners issued a statement clarifying concerns over rising refining margins.
The Petroleum Refinery Industry Group said the increase in the market gross refinery margin from about two baht per litre to six baht per litre is merely an indicator of the price gap between crude oil and refined products in global markets and does not represent net profit.
Refineries must still bear additional costs, including crude oil premiums, shipping and insurance, which have risen significantly. Operating expenses, inventory gains or losses and price risk management also affect overall profitability.
The group stressed that Thailand’s oil trade operates under a free-market system, meaning refineries cannot set crude purchase prices or retail fuel prices, both of which follow international market benchmarks.
