The government will allow retail fuel prices to gradually increase starting Wednesday, while continuing to heavily subsidise standard diesel to limit the impact on consumers.
Deputy Prime Minister Phiphat Ratchakritprakarn announced the plan at Government House on Tuesday, saying both petrol and diesel prices would be adjusted upward in stages. The diesel price will rise by less than one baht per litre on Wednesday and will be capped at 33 baht per litre, with future adjustments to be reviewed regularly.
Mr Phiphat noted that diesel prices had reached 34.94 baht per litre under previous administrations, adding that the government would gradually move towards that level.
To support key sectors, the government will also supply B20 diesel to agriculture, industry and transport, priced four to five baht per litre cheaper than B7 diesel.
The Oil Fuel Fund Office reported that the fund currently subsidises high-speed diesel by 20.36 baht per litre, gasohol 95 and 91 by 9.73 baht per litre, E20 by 11.06 baht per litre and E85 by 2.28 baht per litre.
Mr Phiphat said the Oil Fuel Fund was running a deficit of about 12 billion baht, with the government aiming to cap total losses at 40 billion baht. If the formation of a new government is delayed and additional loans cannot be secured, the caretaker government may seek permission from the Election Commission for special financial support to continue managing fuel prices.
He also assured the public that Thailand currently has sufficient fuel reserves for around 96 days. Temporary shortages at some petrol stations were mainly due to delivery delays and increased demand, particularly at larger branded stations after smaller independent outlets ran out of stock.
The government is also prepared to source crude oil from Russia if necessary to ensure supply security. Industry leaders have previously confirmed that Thailand has adequate refining capacity to meet domestic fuel demand.