Bangchak opposes plan to dissolve Oil Fund

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BANGKOK, 5 July 2011  – Bangchak Petroleum Plc has voiced disagreement with the incoming government’s policy to terminate the State Oil Fund, insisting that it is an important tool for regulating energy prices of the country. 

Bangchak President Anusorn Saengnimnuan recommended the Pheu Thai-led administration to thoroughly review its plan to reduce fuel prices by shutting down the Oil Fund, which he said had been a crucial instrument in the state’s control of oil prices. Instead, he suggested that the fund be maintained with the rate of collection being adjusted periodically in accordance with the circumstance.

For instance, Mr Anusorn pointed out that the Oil Fund collection could be lowered when the oil price was on the rise in order to shoulder the burden on consumers, whereas the collection could also be raised when the oil price dropped.

The President of Bangchak then warned that the closure of the Oil Fund would cause the majority of motorists to return to using benzene and in turn decrease the popularity of alternative energy. He added that the government would also be faced with the necessity to cut the oil excise tax, which would lead to revenue shrinkage.

According to Mr Anusorn, the incoming government and the new energy minister should urgently convene with the private sector about the energy price restructuring. He said the acquirement of loans for subsidizing fuel prices and the retention of the diesel price at below 30 THB per liter would need to be ended.