The Energy Ministry is seriously concerned about the global diesel price increase of US$2.74/barrel that occurred yesterday. This might lead to domestic diesel prices exceeding the Bt30/litre limit.
An anonymous source within the ministry stated that they might need to decide whether to keep domestic prices around Bt30/litre by increasing subsidies from the Oil Fuel Fund, or to allow them to surpass this level, given the significant global increase from yesterday.
Just before the increase, the Fuel Fund Executive Committee, led by Energy Minister Pirapan Salirathavibhaga, chose to maintain the domestic diesel pump price at a maximum of 30 baht/litre, following a US$0.69 rise in global diesel price to US$104.71/barrel on Tuesday.
At this rate, the source explained that oil traders incur 1.45 baht/litre in oil marketing cost, but the Oil Fuel Fund will need to boost the diesel subsidy by an additional 40 satang/litre, to reach Bt4.57/litre.
The source mentioned that the situation has worsened today after the global price surged by 2.74 dollars per barrel yesterday. If the local diesel pump price cannot exceed 30 baht/litre, the Oil Fuel Fund will have to contribute an extra 40 satang/litre.
Presently, the subsidies on diesel and LPG have caused the Oil Fuel Fund to be in debt by over 100 billion baht.
The source also noted that the Energy Ministry is striving to maintain the current diesel pump price for as long as possible, particularly during the Songkran holiday period, with hopes that global diesel prices might decrease soon.
The Energy Ministry is also collaborating with the Finance Ministry to extend the excise tax reduction on diesel by one baht/litre, which is set to expire on April 19.
