Oil Fuel Fund still able to shield diesel prices: Finance Ministry

The Finance Ministry said on Tuesday that Thailand’s Oil Fuel Fund remains strong enough to cushion current oil price volatility and help keep domestic diesel prices within the government’s policy framework, as authorities work closely to manage the energy crisis.

Speaking at the Finance Ministry on Tuesday (March 10), Permanent Secretary for Finance Lavaron Sangsnit said the Finance Ministry and the Energy Ministry had integrated their work and were closely monitoring the situation. He said the current Oil Fuel Fund mechanism was still operating at full efficiency and remained capable of handling global crude oil price movements.

Lavaron said the fund’s role was central to stabilising domestic diesel prices, which remain a key policy concern for the government amid sharp swings in global energy markets.

Fund still has borrowing capacity

He said the Oil Fuel Fund still had sufficient liquidity and retained borrowing capacity of around 20 billion baht. That amount, he said, should be enough to absorb energy market volatility for some time.

Although Thailand’s energy reserves remain adequate and there is no shortage, Lavaron said all sectors now needed to cooperate seriously on energy conservation as costs continue to rise.

He added that, if the situation became prolonged and the fund needed to borrow more, the government could issue an emergency decree authorising the Finance Ministry to guarantee additional loans to support the fund’s liquidity. Any such borrowing, however, would be counted as part of the country’s public debt.

Excise tax cut seen as last resort

Asked whether tax measures such as a cut in excise tax could be used to ease the burden on the public, Lavaron said the Oil Fuel Fund must remain the first line of defence in managing the crisis.

He said a reduction in excise tax would be considered only as a final measure, if necessary.

Cabinet backs energy-saving measures

Lavaron also referred to energy-saving measures for the public sector approved by the Cabinet on the same day. These include raising air-conditioning temperature settings and reducing inter-agency travel by shifting mainly to online meetings.

He said such stricter measures were the right signal to encourage joint efforts to save energy at a time of high fuel costs.

Too early to assess economic impact

On the broader economic outlook, Lavaron said it was still too early to make a fresh assessment of the impact, as global oil prices remain highly volatile.

He noted that prices had swung sharply, from as high as US$130 a barrel down to US$90, and said authorities would need to wait for the market to stabilise before making a clearer evaluation of the economic effects.