Fuel Prices Thailand
Part of: GIZ International Fuel Price database
Also see: Thailand Energy Situation
Fuel Pricing Policies
| Local Currency: | THB |
| Exchange Rate: | 29.83
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| Last Update: |
"Pricing policy: Thailand established an oil fund after the oil shock of 1973. It has been used both to smooth price swings on the world market and to cross-subsidize socially sensitive fuels. LPG was cross-subsidized until Nov 2007, and for two months in 2009. Gasoline and diesel were subsidized for many months in 2004. Diesel was subsidized in 11 out of 12 months in 2004, and diesel, but not gasoline, continued to be subsidized by the fund in 2005 until Aug. Diesel was again subsidized in 2008, in Jun 2009, in the first four months of 2011 leading up to a closely contested national election in July 2011, and again in Aug and Sep 2012. In addition, the oil fund levy was eliminated for both gasoline and diesel in the last four months of 2011. By Apr 2011, the oil fund reserves had been depleted. Aside from periodic subsidization of gasoline and diesel, the oil fund has been used mainly to subsidize bioethanol and biodiesel in recent years. The Oil Fund had a deficit of 22 billion baht (US$0.7 billion) in Jun 2012. In 2011, the issue at hand was how long government could prevent the diesel price from rising above 30 baht (US$1)/liter. Monthly average prices of diesel in Bangkok and monthly average benchmark FOB prices relevant to Thailand since 2007 are shown below. The plot illustrates government’s attempts to keep the retail price at or below 30 baht/liter.
Tax reductions: In Apr 2011, the cabinet approved a cut in the excise tax for diesel from 5.31 baht (US$0.18)/liter to 0.005 baht (US$0.0002) effective from Apr 21 until Sep 30 to keep diesel price at or below 30 baht (slightly less than US$1)/liter, a move widely criticized for being political even by the Federation of Thai Industries. Although launched initially as a temporary measure, this excise tax reduction has remained in effect to this day. In Jul 2011, the Excise Department said the decision had led to higher diesel consumption and government had lost 9 billion baht (US$300 million) a month. Government in Aug 2011 suspended contributions of 91 and 95 RON gasoline and diesel to the Oil Fund. Officials were sent to 18,000 filling stations nationwide to check the amount of stocks before the new prices became effective; government had set aside about 3 billion baht (US$100 million) to compensate retailers for the inventory. In addition, biofuels enjoy large tax reductions. The total reduction in taxes and charges on E10 for gasoline with 91 RON was US$0.63 per liter of ethanol blended in Feb 2007. By mid-2008, the overall reduction rose to US$2 per liter of ethanol blended, and remained above US$2 in 2012, or triple the FOB price of the same grade of gasoline in Singapore.
LPG pricing: The primary source of the subsidy for LPG is not the Oil Fund but the subsidy applied at the refinery gate: the ex-refinery price has been frozen at US$333 a tonne for more than two decades under a program intended originally to help relieve the burden of households and food vendors. The benchmark FOB price for LPG has been consistently above US$333 since Aug 2004, rising to an average of US$850 a tonne in 2011 and US$920 in 2012. Government’s plan to float the price of LPG for industries in 2008 faced strong opposition and was delayed until Jul 2011, when government began to raise the price by 3 baht/kg every three months until it reached 30.13 baht/kg; price increases above 30.13 baht/kg would require the approval of the National Energy Policy Council, chaired by the prime minister. Many companies switched to 48-kg cylinders, normally reserved for household use. Government began to raise the price of automotive LPG in 2012. The LPG subsidy is borne by government and the CNG subsidy by PTT (formerly known as Petroleum Authority of Thailand), and hence government has used the Oil Fund to finance conversion of taxis from LPG to CNG. PTT is eventually reimbursed for LPG subsidy, but with a long delay. In Sep 2012 in Bangkok, LPG was sold at 18.13 baht (US$0.58)/kg to households, 30.13 baht (US$0.97)/kg to industrial consumers, and 21.38 baht (US$0.69)/kg as an automotive fuel, and these prices were maintained through early 2013. The prices of LPG for residential and industrial consumers in Bangkok, together with recent national monthly consumption, are shown below. The plot shows stagnating consumption of LPG by industrial users and sharply rising consumption of LPG by households, supporting reports that some industrial users may have switched to residential LPG for cost savings.
Kt = kilotonnes. In Nov 2012, government announced a plan to raise LPG prices for all consumers over time to 36 baht (US$1.17)/kg, based on an assumed benchmark price of US$0.90/kg in 2013–2014. The retail price would be raised by 0.5 baht (US$0.02)/kg every month for residential and automotive consumers and by 1 baht (US$0.03)/kg a month for industrial users until 36 baht is reached. In Jan, government announced that the start of the monthly price increases would be delayed from Jan to Apr, on the grounds that a survey would need to be conducted first to identify the recipients of government assistance after the price increase.
Consequences of subsidies: The Oil Fund received authorization to borrow 10 billion baht (US$0.32 billion) in Oct 2011, and another 20 billion baht (US$0.65 billion) in Mar 2012. In Jan 2013, the oil fund was reported to have a deficit of 16.4 billion baht (US$550 million).
Social protection: Government has repeatedly extended a utility subsidy program for low-income households, first introduced in 2008 as world oil prices soared: free electricity to households using up to 90 KWh a month, reduced to 50 kWh in Nov 2011, and free rides on non-air-conditioned public buses and third-class trains.
Information: Energy Policy and Planning Office (EPPO) of Ministry of Energy stopped posting monthly information on the balance of the Oil Fund on its Web site in 2011 in the months leading up to a closely contested general election in July, and has not resumed since. EPPO’s Web site otherwise has detailed information on prices, but subsidies at the ex-refinery level are opaque and not indicated."
(Source: Kojima, Masami. (2013, forthcoming). “Petroleum product pricing and complementary policies:Experience of 65 developing countries since 2009.” Washington DC: World Bank.)
Fuel Prices and Trends
| Gasoline 95 Octane | Diesel | |
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* benchmark lines: green=US price; grey=price in Spain; red=price of Crude Oil
Fuel Price Composition
Price composition for one litre of High Speed Diesel as of 2012/01/01.
Source: Own calculations based on http://www.eppo.go.th/info/8prices_stat.htm and →App. A1
Price composition for one litre of 95-octane gasoline as of January 2011
Source: Own calculations based on http://www.eppo.go.th/info/8prices_stat.htm and →App. A1
At a Glance
| Regulation-Price-Matrix |
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An easy-to-understand price breakdown might be added to the informations given at http://www.eppo.go.th. Information on fuel taxes missing as of May 21st, 2011.
Sources to the Public
| Type of Information | Web-Link / Source |
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| Price Composition | http://www.eppo.go.th/info/8prices_stat.htm (Implicitly available from given data) |
| Pump prices and margins | http://www.eppo.go.th/info/8prices_stat.htm |
| Wholesale Prices | http://www.eppo.go.th/info/8prices_stat.htm |
Contact
Please find more information on GIZ International Fuel Price Database and http://www.giz.de/fuelprices
"High Speed Diesel" contains an extrinsic dash or other characters that are invalid for a date interpretation.
