New energy law to allow for monthly oil price adjustment only
Aim is to move away from global oil prices and instead be based on actual cost under the ‘Cost Plus’ system
The Energy Ministry is drafting a new Energy Act that will put an end to basing domestic energy prices on global prices and allow any adjustments to oil prices just once a month.
The new act will have some 180 articles, with the draft currently being revised by legal experts, Deputy PM and Energy Minister Pirapan Salirathavibhaga said on Tuesday.
“Under the new act, oil price adjustment will be allowed once a month instead of daily,” he said. “The adjustment will not be based on global oil prices, but will use the “Cost Plus” system based on calculations from the actual cost.”
This practice will also be used in setting the price of cooking gas (LPG), he added.
Pirapan added that the new act would also allow transport operators, charitable organisations, and agricultural cooperatives to procure their own oil in a bid to promote the true free trade of energy.
“Operators who can procure oil at cheaper prices than at service stations are encouraged to do so. This will help reduce their operational costs, leading to the reduction of product prices and thus alleviating people’s financial burden,” the minister said.
Pirapan added that the drafting of the new Energy Act had started in April this year after the ministry received information on oil costs from traders, which was submitted to the authority for the first time in 50 years.
“We expect that the draft of the Energy Act will be finalised within this year, around the same time as the draft on installing solar panels on residential buildings,” he said. “The ministry intends to have these two laws enacted as soon as possible to create a fair, stable and sustainable energy system.”
