Pump oil profits to Fund: govt

Pump oil profits to Fund: govt

More talks will be held with oil refineries which are being urged to contribute some of their profits to the Oil Fuel Fund and in turn help reduce retail oil prices.

Deputy Prime Minister and Energy Minister Supattanapong Punmeechaow said no agreement has been reached with oil refineries and further talks are necessary to determine their actual costs and profits.

Oil refineries have been heavily criticised for pocketing extraordinary profits from soaring fuel prices, with calls growing for the government to scalp some of the profits to improve the liquidity of the Oil Fuel Fund, which subsidises oil prices and is about 86 billion baht in the red.

It is believed the government will earn about 20 billion baht over a period of three months if oil refineries reduce refinery margins, which are part of the retail oil price that motorists pay.

Mr Supattanapong said negotiations are going on and data, particularly costs and profits, is needed to ensure fairness. He noted that the 20-billion-baht amount the government expects to earn is just an estimate made by the Energy Ministry.

The ministry, which also is in talks with the Council of State and the Office of the Attorney-General about whether it is possible to intervene, hopes to submit legal aspects of the plan to the cabinet next week, he said.

"We must be fair to all. Oil refineries understand and are willing to cooperate, but when there are claims they are making profits 10 times higher, which is not true, we have to review all the data because performances are up and down and profits are not as high as widely reported," he said.

He said the ministry is examining the laws to see how to proceed and hopes to reach a conclusion as soon as possible.

On June 16, permanent secretary for energy Kulit Sombatsiri said the government was in talks with refineries about contributing part of their profits to the Oil Fuel Fund to improve its liquidity. The fund would be 100 billion baht in the red if no measures were taken.

Meanwhile, key members of the newly established Sang Anakhot Thai Party yesterday joined calls for the government to address oil prices by floating a five-point proposal for government consideration in tackling energy prices.

The party's proposal includes how to reduce hidden costs, which are the result of the country basing prices on reference prices in Singapore even though it has six oil refineries and does not buy refined oil.

Another point is to oversee refinery margins, which is a complex and delicate issue, yet a measure that should be addressed.

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