The Oil Fuel Fund Office (Offo) is considering putting a new cap on the domestic diesel price via its subsidy scheme next week, following the recent decline of diesel reference prices in Singapore.
However, it is unlikely any price decrease will align with lower global diesel prices because the office needs money to support the dwindling Oil Fuel Fund, said Wisak Watanasap, director of the Offo.
The fund has played a key role in curbing Thai diesel prices during the global oil price surge, but because of its limited budget, the government has had to gradually reduce its diesel subsidies.
Since mid-June, the diesel price in Bangkok has been fixed at 34.94 baht a litre.
Officials need to consider a new capped price as the existing price under the subsidy scheme is scheduled to expire at the end of this month.
On Wednesday, the diesel reference price saw a significant decline of US$9.38 per barrel, from copy23.77 per barrel, according to the Offo.
The decrease could have led to lower domestic diesel prices of 32-33 baht a litre, but the capped prices have stayed unchanged because officials need to earn money for the fund.
Mr Wisak said the fund racked up losses of 124 billion baht as of Thursday.
Up to 80.4 billion baht has been spent subsidising diesel prices, while 43.2 billion has been spent on subsidies for liquefied petroleum gas, which households use as cooking gas.
Up to 80.4 billion baht has been spent subsidising diesel prices, while 43.2 billion has been spent on subsidies for liquefied petroleum gas, which households use as cooking gas.
The existing subsidies are scheduled to end on September 24th.
Source: Bangkok Post