The Energy Ministry is set to hold discussions this week regarding the substantial losses experienced by the state Oil Fuel Fund, attributed to oil and gas subsidy programs. Despite the financial challenges, the agency affirmed that the fund’s situation is still manageable.
The fund, which is under the scrutiny of a subcommittee led by Lavaron Sangsnit, the permanent finance secretary, reported a loss of 84.3 billion baht as of February 9, with significant amounts spent on subsidizing oil and liquified petroleum gas (LPG) prices.
To mitigate these losses, the Oil Fuel Fund Office (OFFO) has been authorized to secure loans up to 110 billion baht, of which 75 billion baht has already been obtained from banks. Daily, Offo allocates approximately 200 million baht to support price subsidy schemes, particularly focusing on diesel, gasohol, gasoline, and LPG subsidies.
Recent drops in Platts oil reference prices have somewhat alleviated the fund’s financial strain. Contributions from gasoline and gasohol users, along with a small levy on fuel oil, are measures in place to bolster the fund. OFFO continues to monitor global crude oil price fluctuations due to geopolitical tensions and economic shifts, especially concerning the Chinese economy’s slowdown, which could impact global oil demand and prices. (NNT)
