Thailand: THB29bn budget to cap diesel

  • The Energy Policy Administration Committee has approved a budget worth around THB29bn to put a cap on the diesel price at below THB30 per litre in line with an order from Prime Minister Prayut Chan-o-cha.
  • Up to THB20bn of the budget will come from loans to be obtained from commercial banks while THB9bn will come from the state Oil Fund. The budget will allow the diesel price control to last until Mar 22.
  • Mr Supattanapong said the relief measure is based on a possibility that global oil prices will return to normal levels after the winter during which energy for heaters is in high demand.
  • He said if global oil prices rise above USD90 per barrel, officials may need to cut the excise tax on oil, currently standing at between THB5.15 and THB5.99 per litre.
  • Demand for oil is expected to increase to cope with a shortage of coal and natural gas in Europe and China. High oil prices also stemmed from the limitation of supply of crude oil from oil cartels.
  • Over this week, prices of oil, gas and coal will remain high due to the easing of lockdown measures and an increase in travel.
  • Though, the Thai Oil Plc also said that more oil is likely to be added to the global oil market due to new crude oil production in the US, citing a report by energy services firm Baker Hughes.

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