Fuel prices to rise by Bt6 a litre as war drives oil surge, says Oil Fuel Fund board
Thailand will raise all retail fuel prices by 6 baht a litre on March 26 as Middle East tensions push up global oil costs and deepen the Oil Fuel Fund deficit.
On Wednesday (March 25), the Oil Fuel Fund Management Committee approved a reduction in fuel price subsidies for diesel and the petrol group, resulting in a 6-baht-per-litre increase in retail prices for all fuel types from tomorrow (March 26).
The price adjustment follows escalating tensions in the Middle East, which have driven oil prices steadily higher. Diesel prices in the Singapore market have surged sharply from US$198.20 a barrel on March 23 to US$242.91 a barrel, according to the committee.
The situation has also severely affected the liquidity of the Oil Fuel Fund, which is now bearing compensation costs of around 2.59 billion baht a day, or about 80.34 billion baht a month.
The committee said there was an urgent need to reduce the burden in order to preserve the fund’s liquidity and maintain long-term price stability amid continued volatility in the global oil market.
Apart from cost pressures, the rise is also aimed at bringing domestic prices more in line with those in neighbouring countries. Malaysia, for example, has already increased diesel prices from 32.40 baht per litre on March 16 to 39.54 baht per litre.
Keeping domestic prices too low would create incentives for fuel smuggling across borders and stockpiling for speculative gain, the committee said. It added that this latest adjustment would help curb such practices and prevent national resources from leaking to groups seeking illicit profit.
However, the committee said the government had prepared measures to ease the impact on people’s living costs as much as possible. These include support for vulnerable groups, public transport operators, farmers, fishermen, state contractors, and industrial and service businesses.
“At a time when the country’s energy security remains volatile, the Oil Fuel Fund Management Committee asks for cooperation from the public in understanding this difficult situation and in adjusting energy consumption habits to use energy wisely, only when necessary, and as efficiently as possible,” the committee said.
“The result will not only help reduce the direct burden on your own household expenses, but also lessen the burden on the country and strengthen the Oil Fuel Fund so that it can continue to support all citizens sustainably in the future.”
