Thailand's Oil Fuel Fund is seeking a loan of up to 150 billion baht to stabilise its finances and continue subsidising domestic fuel prices as global diesel costs soar, according to Prasert Sinsukprasert, energy permanent secretary.
The fund, which recorded a loss of 48.2 billion baht as of April 2, well above the legal limit of 40 billion baht, has been forced to scale back diesel subsidies.
Support was reduced from 22.89 baht to 17.78 baht per litre, pushing retail diesel prices up by 3.5 baht to 44.24 baht per litre, nearly 50% higher than a month ago.
Subsidies for diesel are currently capped at 1.4 billion baht per day.
Mr Prasert said the proposed loan would allow the fund to continue subsidising fuel for two more months.
He noted global diesel prices have been extremely volatile, surpassing levels registered during the onset of the Russia-Ukraine war.
Prices jumped from an average of US$92 per barrel before the Israeli-US conflict with Iran to $290 per barrel on April 2, higher than the $150 per barrel notched during the Russian invasion of Ukraine.
The government's subsidy programme covers key fuels such as diesel, vital for transport and industry, and liquefied petroleum gas (LPG), widely used for household cooking.
The Energy Policy Administration Committee recently extended the LPG price cap until May 31, keeping the cost at 423 baht per 15kg cylinder.
The fund subsidises LPG at 1.17 baht per kg, holding retail prices at about 25 baht per kg.
Mr Prasert, who sits on an ad-hoc committee reviewing Thailand's oil pricing structure, said authorities are examining the gross refining margin -- the difference between crude oil and refined product prices -- and have requested detailed cost data from all six domestic refineries.
No decision has been made on adjusting ex-refinery prices or imposing a windfall tax on refiners who gain from a surge in crude prices, he said.
Additional measures include targeted support for small fishing boats, which can buy tax-free oil, and promoting biodiesel B20, a blend of 80% diesel and 20% palm oil-derived methyl ester, to ease the burden on consumers.
