The Oil Fuel Fund Office (Offo) in Thailand has expressed the need for new measures to support and manage the fund amidst concerns that oil and gas subsidies will deplete its resources. The director, Wisak Watanasap, plans to inform the Offo board about the situation and discuss potential solutions.
Billions of baht have already been spent on subsidizing the prices of diesel, gasohol, gasoline, and liquefied petroleum gas (LPG) to ease the financial burden on households and businesses. The subcommittee responsible for managing the fund, led by permanent finance secretary Lavaron Sangsnit, is expected to convene to address potential liquidity shortages.
As of February 2nd, the fund has incurred a loss of 84.3 billion baht, with 37.9 billion baht spent on subsidizing oil prices and 46.5 billion baht on subsidizing LPG prices. The Offo has taken on a debt of 110 million baht to maintain liquidity and cover interest payments.
The fund currently spends an average of 200 million baht per day to support price subsidy programs, with 68-70 million baht per day dedicated to subsidizing diesel prices. The government has decided to extend the diesel and LPG price subsidy programs until the end of March, with diesel prices being kept below 30 baht per liter and LPG prices fixed at 423 baht per 15-kilogram cylinder.
Gasoline and gasohol prices are also regulated by the fund. The government recently approved a one-baht per liter subsidy for gasoline and gasohol prices via the fund, although the duration of this subsidy has not been specified. Mr. Wisak emphasized the importance of implementing careful measures to manage the fund, especially considering the potential impact of geopolitical conflicts in the Middle East and Ukraine on global crude oil prices. Prasert Sinsukprasert, the permanent energy secretary, has suggested that officials from the Energy and Finance ministries hold discussions to determine the direction of the subsidy programs.
He also proposed considering a levy collection from motorists to support the fund and oil excise tax.
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