The Oil Fuel Fund Office (OFFO) plans to borrow 20 billion baht to subsidize diesel and set the ceiling price at no more than 30 baht a liter.
Kulit Sombatsiri, Permanent Secretary for the Ministry of Energy, said the decision came as the conflict between Russia and Ukraine intensifies. The conflict triggered the EU and other world powers to impose severe sanctions against Russia. The move poses significant repercussions on the global economy and, inevitably, oil prices worldwide.
Kulit said that the ministry already received several lending offers from interested financial institutes and expects to finalize the deal next month.
Another loan request of 10 billion baht will be proposed to the Cabinet this month to further increase the liquidity of the oil fund, according to a source from the Ministry of Energy. The rise in crude oil prices stemming from the Black Sea conflict largely contributes to the decision.
Suphant Mongkolsuthree, Chairman of the Federation of the Thai Industries, meanwhile, expressed his opinion on the Ukrainian crisis. He said rising crude oil prices will also push the inflation rate higher and will eventually affect consumer confidence and investor confidence. Suphant added that the conflict will ultimately slow down the world economy to a sluggish level. (NNT)