BANGKOK, Thailand – The Oil Fuel Fund Management Committee has approved a cut in diesel subsidies, setting the retail price at 33 baht per liter as authorities seek to reduce pressure on the fund and maintain price stability over time. The approval comes as rising global energy costs continue to strain the fund’s finances.
The adjustment follows a sharp increase in diesel prices in the Singapore market amid escalating tensions in the Middle East, including attacks on Iran. Prices climbed from 92 U.S. dollars per barrel to 223 dollars, raising costs by about 26 baht per liter. The Oil Fuel Fund has been covering subsidies of nearly 2.4 billion baht per day, or roughly 70 billion baht per month.
Officials say scaling back subsidies is necessary to preserve liquidity and ensure the fund can continue supporting fuel price management. The change also brings domestic diesel prices closer to levels in neighboring countries, with Malaysia recently raising prices to around 38.70 baht per liter.
Lower domestic prices had raised concerns over cross-border smuggling and stockpiling for profit. Authorities expect the new pricing to reduce such risks while easing pressure on public resources, with the Energy Ministry coordinating measures to limit the impact on consumers. (NNT)
