SPR or Strategic Petroleum Reserve is a strategic oil and gas reserve system that the Ministry of Energy is pushing for under the policy of ‘Remove, Reduce, Release, Create’. This system is one of the important tools that the government uses to prevent and manage energy risks, leading to the country’s economic stability and energy security.
The idea of ??the Ministry of Energy under the leadership of Mr. Pirapan Salirathavibhaga is to overhaul Thailand’s energy structure by pushing for SPR to reserve oil by the government to be sufficient for domestic demand for 90 days according to the standards of most members of the IEA (International Energy Agency) or the International Energy Organization. In the current system, the private sector reserves oil, although commercial oil reserves are sufficient for use for 25-36 days, the government cannot manage it much, except in cases of necessity, such as when a state of emergency or martial law is declared.
The Ministry of Energy is currently reviewing relevant laws a
nd studying the formats and methods of oil reserves abroad in order to design the SPR format that will be most consistent with the context of Thailand.
The basic idea of ??the SPR policy is that the government will be the one to set the policy for oil reserves, which can be used to manage domestic retail prices to decrease during periods of high global oil price volatility. The model is similar to the Oil Fund, where the Oil Fund collects import and export fees and adjusts the collection rate of each type of oil as appropriate for each period. However, the SPR will use the oil reserves in the warehouse to sell to maintain the oil price instead.
However, although SPR is not new, Thailand does not have a law directly related to this issue. SPR will benefit the people and the country’s economy because the government holds reserve fuel and has enough for domestic use for up to 90 days. This allows the government to know the true cost of imported fuel in order to supervise domestic fuel prices that truly reflect
the cost. The important result is that people buy fuel at a fair price. At the same time, there are still limitations of SPR, such as costs, what will the management model be, and what criteria should be used to reserve enough fuel for domestic use? Because if we use the IEA standard, Thailand’s economic size and oil consumption and import volume are still much smaller. We must also consider the cost-effectiveness.
From now on, the directly related agencies such as the Oil Fund will have to start reviewing and adjusting their roles in a major way to accommodate the new structure that will change if the SPR establishment law is passed smoothly. We will have to wait and see who the director of the Oil Fund Office will be who will take the reins.
Source: Thai News Agency