Thailand Overhauls Oil Refinery Pricing Formula to Reduce Costs
The Ministry of Energy has removed long-standing 'phantom' costs from the oil refinery pricing formula, aiming to lower fuel prices for consumers.
On October 28, 2026, Thailand's Minister of Energy, Ekkanat Promphan, announced a significant restructuring of the nation's oil refinery pricing formula. According to reports from Khaosod Online, the Energy Policy Administration Committee (EPAC) has officially removed three 'phantom' cost components that have been included in the calculation for over 22 years: shipping costs, insurance, and transit loss fees from Singapore. Additionally, the government has reduced the oil reserve requirement to two-thirds of its previous level to better reflect actual inventory needs. These changes took effect on October 29, 2026. Officials estimate that these adjustments will lower refinery prices by 0.0875 to 0.3548 baht per liter, potentially saving approximately 29.70 million baht daily and 10.839 billion baht annually. Following this decision, the Oil Fuel Fund Committee has adjusted the fuel fund contribution rates, including a reduction in the subsidy for B7 diesel by 0.38 baht per liter. For residents and travelers, this policy shift is intended to ease the burden of high fuel costs. While the immediate price reduction at the refinery level is confirmed, the final impact on retail pump prices remains to be seen as market adjustments continue to unfold.
