The government will let retail fuel prices rise gradually from Wednesday but will heavily subsidise the pump price of standard diesel.
Deputy Prime Minister and Transport Minister Phiphat Ratchakitprakarn announced details at Government House in Bangkok on Tuesday morning.
He said petrol and diesel prices would gradually increase from Wednesday onwards.
The diesel price would rise by less than one baht per litre on Wednesday morning and would be capped at 33 baht per litre. The government would decide on diesel price increments on Tuesday evening, he said.
Mr Phiphat said diesel had been at 34.94 baht per litre during the tenures of two previous governments. “We will gradually increase the price towards that point,” he said.
In addition, the government would supply B20 diesel to the agriculture, industrial and transport sectors. It would be cheaper than B7 diesel by four or five baht per litre, Mr Phiphat said.
The Oil Fuel Fund Office said on Monday that the fund was subsidising high speed diesel by 20.36 baht per litre, gasohol 95 and 91 petrol by 9.73 baht per litre, gasohol E85 petrol by 2.28 baht per litre and gasohol E20 petrol by 11.06 baht per litre.
Mr Phiphat said the Oil Fuel Fund was about 12 billion baht in the red on Monday and the caretaker government would cap the fund's losses at 40 billion baht.
If the installation of the new government were delayed and the Finance Ministry could not secure an immediate loan for further price subsidies, the caretaker government would ask the Election Commission (EC) for permission to provide special financial support to help manage fuel prices throughout the country, he said.
Mr Phiphat said that as of Tuesday Thailand had adequate fuel reserves for 96 days’ use. Current shortages at local petrol stations resulted mainly from deliveries being unable to meet rising demand.
According to the transport minister, there are about 20,000 small, independent petrol stations nationwide. Shortages at these outlets led to much higher demand at the roughly 10,000 petrol stations operated by the major brands. They were forced to close when the pumps ran dry, and to await the next delivery.
He reaffirmed that Thailand would not face fuel shortages. The government planned to buy crude oil from Russia, if needed, to ensure a secure supply, he said.
Oil industry leaders have previously given assurances that Thailand has adequate refining capacity to meet domestic demand.
