Thailand Prepares to Shield Motorists from Fuel Price Shocks

Motorists across Thailand have enjoyed an unusual stretch of calm at the pump, but the Energy Ministry says it is preparing for fresh turbulence as global politics shift. Bangkok’s leading petrol stations continue to post the same figures they introduced after a small holiday discount in late December, yet officials warn that an uptick in geopolitical friction could travel quickly from Washington and Caracas to Thai wallets.

At a glance: what to watch

• Retail prices still flat – Gasohol 95 is hovering around 31.35 baht/litre; basic diesel at 30.44 baht.

• Geopolitics on the radar – US moves in Venezuela and wider regional tensions are the main external risk.

• Government vows no immediate hikes – The Fuel Fund remains the first line of defence, with diesel capped and LPG subsidised.

• Economists see limited short-term impact – Venezuela contributes <1 % of global supply, but markets stay skittish.

Where Thai prices stand right now

A tour of price boards in Bangkok, Chiang Mai and Khon Kaen shows that the nationwide average for Gasohol 91 sits just under 31 baht, E20 is below 30 baht and premium petrol stays well above 40 baht. Diesel, the lifeblood of logistics, remains capped near 30 baht after a string of excise tax tweaks and Fuel Fund injections. These numbers mark a sharp retreat from the highs of mid-2025 and have helped headline inflation cool to 1.3 % according to the Commerce Ministry’s latest estimate.

How foreign politics creep into a Thai fuel tank

Washington’s decision to re-engage with Venezuela’s vast but dilapidated oil sector grabbed headlines this month. Energy analysts in Bangkok stress that any near-term supply bump is modest because PDVSA’s wells need billions of dollars and years of rehabilitation. Still, the diplomatic choreography adds another layer of uncertainty to crude futures already rattled by conflicts in the Middle East and worries about Red Sea shipping lanes.

For Thailand, the immediate exposure is indirect: the kingdom imports most of its crude from the Middle East and relies on Singapore’s benchmark prices for refined products. “If Brent swings wildly, Singapore follows – and we follow Singapore,” one senior trader at a major Thai refiner explained. A sudden US-Venezuela misstep, or new sanctions, could yank Brent upward and force refiners here to pay more for feedstock within days.

The playbook in Bangkok: hold the line

Energy Minister Auttapol Rerkpiboon says the ministry meets daily with the Fuel Fund and oil retailers to track shipping costs, insurance premiums and exchange-rate moves. The Prime Minister has instructed the ministry to be prepared to deploy the following tools:

Fuel Fund cushions – The controversial fund, still carrying a deficit from last year’s diesel rescue, can absorb several billion baht more without breaching its legal ceiling.

Targeted tax cuts – Past excise reductions shaved up to 5 baht/litre off diesel; officials keep that lever handy.

Strategic stocks – Thailand holds roughly 45 days of crude and products; a separate proposal for a national reserve agency is under review.

Officials insist these measures give them enough breathing room to avoid an abrupt retail hike, at least through the first quarter.

What independent economists say

Kasikorn Research Center and Chulalongkorn University’s Energy Studies Institute both project Dubai crude – Thailand’s reference grade – to average 60-68 USD/barrel this year, versus 71 USD in 2025. Their models assume no major supply shock and a gradual Venezuelan rebound. If that scenario holds, petrol could remain within ±1 baht of today’s levels for several months. However, they flag three swing factors: a wider Middle-East escalation, a sharper-than-expected US interest-rate cut boosting demand, and tropical-storm disruptions to Gulf of Mexico output.

Beyond the pump: ripple effects

Stable fuel costs are already filtering through to freight rates and food prices. The Land Transport Federation says inland trucking fees have stopped rising for the first time in 18 months, giving relief to SMEs that struggled with last year’s energy spikes. The Finance Ministry believes every 1 baht change in diesel adds or subtracts 0.2 percentage points from core inflation.

Still, volatility scares investors. Fund managers note that when Brent swung 8 USD in a single week last October, the SET Energy & Utilities index fell 6 %. “Even if local prices are cushioned, refinery margins and petrochemical earnings move with global sentiment,” one portfolio strategist warned.

Tips for drivers looking to save

A few practical steps can stretch each litre, regardless of global politics:

• Check tyre pressure – Under-inflated tyres cut fuel economy by up to 5 %.

• Avoid idling with the AC running – Idling burns roughly 0.5 litres/hour.

• Use E20 when your engine allows – The blend is currently 2 baht cheaper per litre than Gasohol 95.

• Download retailer apps – Many stations now offer digital coupons worth 0.20-0.40 baht/litre.

The road ahead

Thailand’s pump prices look set for a quiet start to the year, yet traders and officials agree the calm could end quickly if geopolitics spark another rally in crude futures. For now, the Energy Ministry’s watch-list – spanning the Gulf of Mexico to the Orinoco Belt – aims to ensure that when global markets flinch, motorists here feel as little pain as possible.