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Thailand Adjusts Retail Oil Prices amid Global Price Surge

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BNN Correspondents
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Thailand Adjusts Retail Oil Prices amid Global Price Surge

In a significant development, retail oil prices in Thailand have been adjusted on November 29, 2022. Bangchak Corporation, a key player in the country's energy sector, has announced a reduction in the price of Gasohol 95 by 0.40 THB per liter, resulting in a new price of 36.05 THB per liter. Meanwhile, Gasohol 91 is now priced at 34.28 THB per liter. However, the prices of Diesel B7 and Hi Premium Diesel S B7 remain unchanged at 29.94 THB and 43.64 THB per liter respectively.

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Global Oil Market Dynamics

Simultaneously, the international oil market has witnessed a significant surge, with West Texas Intermediate (WTI) crude oil prices rising by over 2% on Tuesday, November 28. This increase is largely driven by expectations that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, will further curtail production in an upcoming meeting. The market sentiment is also buoyed by the weakening of the US dollar and reports of decreased oil production in Kazakhstan due to severe storms.

The Impact of Rising Oil Prices

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This escalation in oil prices has disrupted the emerging-market disinflation trade, affecting assets, government bonds, and currency exchange rates of developing nations. Economies heavily dependent on oil imports or where crude constitutes a significant portion of household income are particularly impacted. The ripple effects of the rising oil prices extend to foreign-exchange rates, capital flows, and consumer spending patterns in these countries, potentially putting their economic stability at risk.

Thailand's Economic Concerns Amid Oil Price Fluctuations

The Bank of Thailand has expressed concerns about the increasing volatility of the baht and the mounting household debt in the country. It underscores the influence of interest rates in advanced economies on currency volatility and capital flows. Furthermore, the decline in spending by foreign visitors, consequential to Thailand's tourism-reliant economy, is exacerbating the pressure. Despite positive signs such as a rebound in tourism and recovering exports, challenges related to rising household debt and baht volatility persist. The central bank is expected to address these concerns in its upcoming interest-rate meeting.

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