The Oil Fuel Fund Office (OFFO) announced a diesel price increase of 50 satang per liter effective on Apr 6, a week before the Songkran holiday exodus, amid concerns over the escalating cost of subsidizing fuel, which is nearing a 100 billion baht debt. The price adjustment applies to both standard and premium diesel, setting the prices at 30.44 baht and 42.44 baht per liter, respectively.
The decision follows the OFFO’s struggle to manage debts from maintaining diesel prices at 30 baht per liter since last September and subsidizing liquefied petroleum gas (LPG) for over two years.
The fund’s deficit has reached 99.8 billion baht, a situation exacerbated by global oil price hikes influenced by geopolitical tensions in the Middle East and Ukraine. With Brent crude oil prices crossing the $90 a barrel mark this week, a first since September, the OFFO is under pressure as it faces challenges in continuing price caps. The agency is authorized to borrow up to 110 billion baht and has so far utilized 75 billion baht from banks to mitigate the financial strain.
As global oil prices are expected to remain high, the Oil Fuel Fund Office is exploring additional measures to assist motorists with rising fuel costs, suggesting a strategic shift in managing the fund’s resources and addressing the subsidy issue. (NNT)
