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Kla Party leader Korn Chatikavanij urged the commerce minister to use an executive order to lower refinery price which could lower oil prices by at least four baht per litre.
“Everyone agreed that the refinery price is too high but how come the commerce ministry is not exercising its power to control the price when the people are suffering?” he asked during a press conference on Monday.
Korn said oil products, such as liquefied petroleum gas (LPG) and fuel, are controlled products and Commerce Minister Jurin Laksanawisit has the power under the Price of Good and Service Act of 1999 to put a cap on profits from oil products.
“If Jurin uses the power that he has now, oil prices could go down by four baht within this week,” he said.
He said the four baht reduction was calculated from rising refinery price from the average of 0.7 baht per litre in 2020, 0.89 baht in 2021, 1.35 baht in January 2022, 1.58 baht in February and 2.8 baht in March.
With that, the average refinery price in the first quarter of 2022 was at 1.91 baht which provided six refineries in Thailand with a profit of around 28 billion baht and that was “very high”, he said.
He said if the government does nothing, the six refineries could make a total profit of 68 to 69 billion baht in 2022.
Korn said the refinery price jumped up to as high as 8.56 baht per litre on June 10 and he expects the average price to be around six baht by the end of June.
He said if the commerce minister issued the order to lower the average refinery price down to 1.58 baht per litre which was the price before Russia invaded Ukraine, oil prices would go down by four baht.
The Petroleum Refining Industry Club, a unit under the Federation of Thai Industries (FTI), has refute Korn’s claim on Monday, saying that the prices that he used were not based on the real Gross Refining Margin (GRM) and they neglected other expenditures.
They said the refinery price only increased by only 0.47 baht in the first quarter of 2022, not as much as tenfold which was claimed by the leader of the Kla Party.
Apart from urging Jurin to issue the order, Korn also said that the energy ministry’s move oil refineries to donate their excess profits to support the Oil Fuel Fund for around eight billion baht per month in the third quarter has yet to affect oil prices because it was just a verbal agreement between Energy Minister Supattanapong Punmeechaow and the six refineries.
“There is no legal binding, how can we be sure that these refineries will keep their promise?” Korn asked.
He said the government could introduce an emergency decree to ensure that the refineries will contribute the money to the fund.