New law to regulate Thailand oil and gas prices nears approval

A draft law aimed at empowering energy officials to regulate domestic oil and cooking gas prices is advancing towards parliamentary approval. This legislation could become a significant energy policy under the emerging Paetongtarn Shinawatra government.

Energy Minister Pirapan Salirathavibhaga highlighted yesterday, September 11, that the bill should be reviewed by legislators before the year’s end.

Pirapan championed this policy since his reappointment as energy minister. His tenure was briefly interrupted following the Constitutional Court’s decision to dismiss Srettha Thavisin as prime minister due to an ethics violation.

“This law will ensure domestic oil prices reflect real costs without depending on Singapore’s Platts reference prices.”

The proposed bill includes the formation of a new commission responsible for determining appropriate tax rates on oil. Currently, this duty falls under the Finance Ministry, but the new law would transfer tax collection responsibilities to financial officials exclusively.

Pirapan assured that allowing energy officials to set tax rates would not breach existing Finance Ministry regulations. The officials would base their tax calculations on prevailing economic conditions.

Additionally, the new law would lead to the dissolution of the Oil Fuel Fund Office, with the new commission taking over fund management duties. This fund currently supports diesel and liquefied petroleum gas (LPG) subsidy programmes, with LPG commonly used as cooking gas in households.

The commission under the new bill would meet monthly to discuss and adjust oil and cooking gas prices. This approach aims to provide businesses and households with ample time to plan their fuel usage effectively.

The state policy to keep retail diesel prices below 33 baht per litre is set to expire on October 31, while the subsidy that fixes LPG prices at 423 baht per 15-kilogramme cylinder is scheduled to end tomorrow.

Pirapan indicated that these subsidy programmes are likely to be extended but did not specify the duration. He emphasised the necessity of controlling diesel, LPG, and electricity prices during the ongoing economic slowdown, reported Bangkok Post.