Fuel Fund borrowing hits snag as Thailand runs low on subsidy

Finance Minister Arkhom Termpittayapaisith said the ministry would submit the issue to the Council of State for legal advice on the fund’s status as a borrower.

“Meanwhile, the Oil Fuel Fund can ask the government to boost its liquidity via the central budget, which would require approval from the Energy Ministry,” Arkhom added.

The diesel price rose today from 32.94 to 33.94 baht per litre, on instructions from the Oil Fuel Fund executive committee.

The Oil Fuel Fund Office says the fund is 86.02 billion in debt – 40.14 billion from subsidising fuel and 35.88 billion baht from subsidising LPG – and only has liquidity of about 10 billion baht.

Thai Chamber of Commerce (TCC) chairman Sanan Angubolkul says a diesel price rise to 35 baht per litre would impact people’s living costs. However, the private sector believes the 35-baht price point is still “manageable” as they have adjusted strategies to cope with the global energy price crisis, he added.

Sanan said 35 baht per litre was still lower than in neighbouring countries, adding that the actual market price was higher.

Federation of Thai Industries (FTI) president Kriangkrai Thianukul said the private sector was more worried about the shortage of raw materials than the rising prices of fuel or products. He explained that global demand for Thai exports remained high, but rising costs could disrupt supply chains in certain industries.