Thailand Energy Ministry Considers Dropping 150 Billion Baht Fuel Loan Plan
The Thai Energy Ministry is reconsidering its plan to borrow 150 billion baht to support the rapidly depleting Oil Fuel Fund. This potential shift follows successful negotiations with major oil refineries, resulting in a reduction of ex-refinery diesel prices by 2 baht per litre. Energy Minister Akanat Promphan stated that this price cut has significantly eased financial pressure on the fund, thereby reducing the urgency for government borrowing. The fund had accumulated a deficit of 60 billion baht by mid-April, driven by heavy subsidies for domestic oil prices and liquefied petroleum gas (LPG) amidst rising global costs linked to geopolitical conflicts in the Middle East. The agreement involves six refineries operated by PTT Plc, Bangchak Corporation Plc, and Star Petroleum Refining Plc, with effects starting April 9. While the Finance Ministry had prepared for the loan via an executive decree, similar to measures taken in 2022, the current relief may render it unnecessary. The price reduction will be reviewed after the Songkran festival, with possibilities for further cuts. This development has been welcomed by opposition parties and academics who sought to prevent record-high oil prices.
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Thailand Energy Ministry Considers Dropping 150 Billion Baht Fuel Loan Plan
The Thai Energy Ministry is reconsidering its plan to borrow 150 billion baht to support the rapidly depleting Oil Fuel Fund. This potential shift follows successful negotiations with major oil refineries, resulting in a reduction of ex-refinery diesel prices by 2 baht per litre. Energy Minister Akanat Promphan stated that this price cut has significantly eased financial pressure on the fund, thereby reducing the urgency for government borrowing. The fund had accumulated a deficit of 60 billion baht by mid-April, driven by heavy subsidies for domestic oil prices and liquefied petroleum gas (LPG) amidst rising global costs linked to geopolitical conflicts in the Middle East. The agreement involves six refineries operated by PTT Plc, Bangchak Corporation Plc, and Star Petroleum Refining Plc, with effects starting April 9. While the Finance Ministry had prepared for the loan via an executive decree, similar to measures taken in 2022, the current relief may render it unnecessary. The price reduction will be reviewed after the Songkran festival, with possibilities for further cuts. This development has been welcomed by opposition parties and academics who sought to prevent record-high oil prices.
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