Fuel fund forecast: Thai govt keeps diesel costs low, faces a billion-baht burnout

The Oil Fuel Fund Office (OFFO) projected a lack of nearly a hundred billion baht due to the government’s determination to maintain domestic diesel prices under 30 baht a litre until December. This forecast assumes a rise in international diesel prices through the winter, a interval sometimes marked by heightened energy demand.
In 2022, the common world diesel costs for August and September stood at US$116.7 per barrel. However, costs spiked to US$176 per barrel amid the battle between Russia and Ukraine.
To subsidise the diesel worth at 8.02 baht per litre and liquefied petroleum fuel (LPG) at 9.2 baht per kilogramme, the Offo has been utilising funds. It also collects a levy starting from 0.81 to 9.38 baht per litre from gasoline and gasohol customers to assist the fund.
Nevertheless, the day by day levy collection of 153 million baht falls wanting the 573 million baht in subsidies required to cap diesel and LPG retail prices.
As of October three, the fund had incurred a loss of 62 billion baht, up from 49 billion baht before the general election in May, in accordance with Wisak Watanasap, director of the OFFO. This escalating financial burden has compelled Offo to hunt several billion baht in loans from business banks, reported Bangkok Post.
The discount in diesel costs is a key policy of the Srettha Thavisin Cabinet, which was resolved at its inaugural assembly to implement a model new diesel price from September 20. The authorities goals to decrease energy prices for motorists and producers, who primarily rely upon diesel.
To keep Insider at 29.94 baht, the federal government needs to scale back the diesel excise tax to 3.67 baht per litre, down from 5.ninety nine baht per litre, in addition to using funds to subsidise the retail value.
Wisak mentioned that the Offo is intently monitoring a variety of components that would impact world crude oil costs, together with foreign exchange rates, interest rates, demand for oil from China, and the management of oil provide by Opec.
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