Oil Fuel Fund Office Increases Diesel Price, Cuts Gasohol Levy

The Oil Fuel Fund Office board has announced that the retail price of standard diesel would increase by one baht to 34 baht per liter from today.

The measure was set to take effect from 5:00 a.m. on Tuesday. Director Wisak Watanasap explained that the diesel price increase would apply to all retailers across the country, adding that the decision was due to the rise in world oil prices.

According to the latest market reports, Dubai’s diesel prices increased by $8.8 per barrel from its price of $149.49 on May 27 to Thursday, when it was quoted at $158.29.

The increase also responds to the 81.4 billion baht in the red that the Oil Fuel Fund Office had on May 29, a considerable increase from the 72 billion baht reported on May 15, after the government subsidized the diesel price through the fund.

The revised price will remain in place for at least a week before the board meets again to decide whether the sum should be further adjusted.

But the board had previously agreed to set the maximum price for standard diesel at 35 baht per liter with a gradual increase by one baht per liter each week to reflect world oil prices.

Mr. Wisak stated that raising pump prices was necessary, as global prices had risen due to China’s decision to relax lockdown measures and the reduction in strategic oil reserves in the US. European nations’ ban on Russian oil imports has also impacted global diesel prices.

However, the fund is set to get 10 billion baht in loans from the state-run Government Savings Bank and Krungthai Bank later this month. It reportedly expects to obtain 33 billion baht in total loans from both banks.

Meanwhile, despite the increase in diesel prices, the board agreed to help gasohol users by reducing the levy collected. The new contribution for gasohol 91 and gasohol 95 has been reduced by 0.93 per liter to 0.09 baht per liter, well below the previous 1.02 baht.

The board also decided to add a subsidy to gasohol E20, at 0.94 baht per liter from 0.12 baht. According to Mr. Wisak, the decision intends to reduce the retail price of gasohol products, which account for a quarter of the country’s fuel consumption.