Diesel price hike imminent in Thailand, as Oil Fuel Fund grapples with huge deficit
The price of diesel is likely to rise to 31.94 baht per litre from 29.94 baht if the Finance Ministry fails to extend current measures, an Energy Ministry source said.
The comment came on Sunday after the Oil Fuel Fund announced it was grappling with a 78.41 billion baht deficit as of December 3. Of that, 32.48 billion baht has been spent on subsidising oil and 45.93 billion baht on LPG.
The deficit stems from the government’s efforts to cap the price of diesel at no more than 30 baht per litre and household LPG at 423 baht per 15-kilo cylinder.
Though the measure for household LPG has been extended until March 31 next year, the cap on diesel price is set to expire on December 31.
Despite the market’s high benzene and gasohol costs, hovering around 2-3 baht per litre, the source said these measures were straining the Oil Fuel Fund.
“If the Finance Ministry does not extend the price cap, the Energy Ministry will have to raise the price of diesel to 31.94 baht per litre to mitigate the fund’s burden, the source said.
As of Thursday, the global crude oil market has been pressured by a strengthening dollar and uncertainty surrounding the Chinese economy. China is a major global oil importer.
Investors, meanwhile, are closely monitoring negotiations between Russian President Vladimir Putin and OPEC+ (Organisation of Petroleum Exporting Countries plus other oil-producing countries) on the crude oil production agreement in the Middle East.
This negotiation was sparked by OPEC+’s failure to reach an agreement on crude oil production in the first quarter of next year.
