Thailand: Oil Fuel Fund set to borrow billions

  • Deputy permanent secretary of Thailand’s finance ministry, Theeraj Athanavanich, said the Oil Fuel Fund is expected to finish negotiations with banks as it looks to borrow heavily to boost its liquidity.
  • Mr Theeraj said the fund is in talks with several commercial banks, including the state-run Government Savings Bank and Krungthai Bank, with regards to the borrowing. The negotiations are expected to be wrapped up by Jun 22.
  • The fund is in the red because of rising global oil prices. It needs to seek capital to boost its liquidity in case the price of oil increases further, and to deal with the expiration of the government’s diesel excise tax reduction on 20 May 22.
  • In Feb 22 the cabinet agreed to cut the excise tax on diesel by THB3 per litre for three months to help mitigate the impact of high energy prices.
  • The fund will seek to borrow THB30bn. The Public Debt Management Office has already added this borrowing in terms of its public debt management plan for the 2022 fiscal year.
  • The fund was in the red to the tune of THB66.6bn as of 8 May 22, of which THB33.2bn is a loss in the fuel account and THB33.4bn in the liquefied petroleum gas account.
  • The government has introduced 10 measures to help targeted groups ease the burden of living costs, with a budget of THB45.1bn. The measures include a cap on the price of natural gas for vehicles at THB15.5 per kilogramme for three months, starting from Apr 22.
  • A total of 157,000 qualified motorcycle taxi drivers will receive a discount on gasohol of THB250 per month from May-Jul 22.

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