Thai Oil Plc (TOP), Thailand’s largest oil refinery by capacity, expects global oil prices to continue to decline this week to US$84-94 per barrel amid growing concerns over a global economic recession, but the decrease will not cause authorities to reduce domestic diesel prices.
The Oil Fuel Fund Office (Offo) yesterday resolved to maintain the diesel price unchanged at 34.94 baht a litre until next week as it continues to relieve the burden on the Oil Fuel Fund, which was 117 billion baht in the red, said Offo director Wisak Watanasap.
Last week, West Texas Intermediate reference crude oil price stood at $89.01 per barrel while Brent and Dubai reference prices were $94.92 and $93.62 per barrel, respectively, said TOP analysts.
Global crude oil prices show a decreasing trend, following measures aimed at curbing soaring inflation by the US Federal Reserve and the European Central Bank, which raised concerns over a global economic contraction.
Demand for oil also decreased as China is still implementing a zero-Covid policy which affects economic activities, although the policy, which often leads to lockdown measures, has been powerful in terms of containing the spread of the virus.
Pressure on global oil prices, which have skyrocketed since the Russia-Ukraine war erupted, has also been relieved after the Organization of Petroleum Export Countries decided to increase oil production in September by another 106,000 barrels per day.
Libya resumed oil production at 1.2 million barrels per day after internal conflict eased, while the number of new oil rigs in the US increased to 767 units, which promises an increase in oil supply, according to TOP analysts.
Decreasing global crude oil prices have caused the prices of gasoline and gasohol in Thailand to fall by 5.9 baht per litre over the past month.
Less expensive oil also reduced the financial burden on the state’s efforts to control domestic diesel prices. Authorities saw the diesel price subsidy under the Oil Fuel Fund fall from almost 8 baht per litre to 1.13 baht per litre as of yesterday.
The subsidy for liquefied petroleum gas also fell to 11.75 baht per kilogramme, down from 12.7 baht per kg.
