BANGKOK, Aug 29 – The Thai government will spend Bt7 billion from the Oil Fund to peg gasoline and diesel prices in light of surging oil prices due to the conflict in Syria, according to Energy Minister Pongsak Ruktapongpisal.
He expressed concern that the Syrian war could escalate if the US and its allies attack, while Iran and Iraq may retaliate, leading to oil shortages and skyrocketing oil prices.
Thailand’s oil reserves are at 5 per cent, sufficient for 36 days, as required by law but the Dubai oil price could shoot up to US$120 per barrel if the Syrian war drags on.
Bt7 billion from the Oil Fund would last until October, he said, indicating that the burden of the Oil Fund should be alleviated by reducing the subsidy for liquefied petroleum gas (LPG) and increasing the price of LPG by Bt0.50 per litre, from Monday, would be inevitable.
He said the gradually rising LPG price is aimed at lessening the burden of the Oil Fund which has spent Bt140 billion for subsidies in the last 5-6 years.
LPG in Thailand is cheaper than in neighbouring countries, leading to smuggling along the border, he said.