The Thai government is likely to revise the ex-refinery price of oil to bring it in line with the world market, reported the Business Day. The new price will exclude the cost of transportation and insurance from retail fuel prices.

According to the report, the director general of the Energy Policy and Planning Office (Eppo), Mettha Banterngsuk, said the move is not an effort to reduce the oil refining fee as was earlier reported.
He added that the new ex-refinery fee will be officially announced soon.

He said the energy minister will have the authority to approve the proposed new ex-refinery rate.

“We are not going to cut the oil refining fee and the fee will still be in line with that of Singapore. But transportation and insurance costs are major factors than make Thailand’s ex-refinery price higher,” he was quoted as saying.

He added that if the government can cut out these costs, the country’s oil retail price will be equal to Singapore’s.

Separately, Energy Minister Prommin Lertsuridej said: “Oil refiners will certainly get a fair and just deal and the government will not reduce the oil refining fee as was earlier reported. The government will see how much the real cost of refineries is before making any further decision.”

Oil refiners reacted negatively to the government’s proposal to cut the ex-refinery price, claiming it would cost them 6.5 billion baht a year. (US$1=40 baht).

Anusorn Saengnimnual, senior vice president of Bangchak Petroleum Plc (BCP), said the government’s plan will result in a 6.5 billion baht income reduction for oil refineries, while consumers would save only 0.25 baht a litre.

“The government should find other ways to help reduce the oil price burden, such as reducing the oil price subsidy rate and cutting the excise tax on oil,” he told the Business Day.