Officials Plan to Revise Diesel Subsidy Strategy
Energy authorities aim to propose a cap on domestic diesel prices to the government, aiming to ease financial pressure on the dwindling Oil Fuel Fund after the current diesel subsidy ends on March 31, according to the Energy Policy and Planning Office (Eppo).
Currently, the government employs a reduced diesel excise tax and fund resources to maintain diesel at 29.94 baht per liter, preventing a rise to about 34 baht.
The fund's monthly expenditure of 8.7 billion baht on diesel subsidies has resulted in significant losses for the Oil Fuel Fund Office (Offo).
Eppo Director-General Veerapat Kiatfuengfoo announced plans to negotiate with the Finance Ministry for continued diesel excise tax reductions or financial support to subsidize diesel. The goal is to trim the subsidy from the fund by 1-2 baht per liter. The discussion's timing is urgent though not specified.
Despite global oil price drops last year, the government maintained diesel prices below 30 baht a liter to alleviate living costs. Diesel now sees a 4.17 baht subsidy per liter from the fund and a one baht per liter tax reduction, ending April 19.
As of March 28, Offo reported a 98.2 billion baht loss, with subsidies for diesel, gasohol, and liquefied petroleum gas (LPG) contributing to this deficit.
Offo director Wisak Watanasap expressed concerns over the fund's liquidity amidst high spending on diesel and LPG price regulation. With global diesel prices expected to stay above $100, continuing the subsidy without changes could deteriorate the fund's condition, leading to potential diesel price increases without state budget support.
The fund's monthly expenditure of 8.7 billion baht on diesel subsidies has resulted in significant losses for the Oil Fuel Fund Office (Offo).
Eppo Director-General Veerapat Kiatfuengfoo announced plans to negotiate with the Finance Ministry for continued diesel excise tax reductions or financial support to subsidize diesel. The goal is to trim the subsidy from the fund by 1-2 baht per liter. The discussion's timing is urgent though not specified.
Despite global oil price drops last year, the government maintained diesel prices below 30 baht a liter to alleviate living costs. Diesel now sees a 4.17 baht subsidy per liter from the fund and a one baht per liter tax reduction, ending April 19.
As of March 28, Offo reported a 98.2 billion baht loss, with subsidies for diesel, gasohol, and liquefied petroleum gas (LPG) contributing to this deficit.
Offo director Wisak Watanasap expressed concerns over the fund's liquidity amidst high spending on diesel and LPG price regulation. With global diesel prices expected to stay above $100, continuing the subsidy without changes could deteriorate the fund's condition, leading to potential diesel price increases without state budget support.
