Oil Fund deficit tops 42bn baht; Thai fuel rise trails regional peers

Veerapat Kiatfuengfoo, Deputy Permanent Secretary of the Ministry of Energy, said on March 30 at Government House, during a briefing by the Joint Management and Monitoring Centre for the Situation in the Middle East, that the ministry was monitoring the energy situation amid volatility caused by the Middle East crisis.

He said global oil prices remained elevated because of persistent uncertainty in the region, with Dubai crude surging to US$120 a barrel, up 72% from before the outbreak of fighting.

Diesel in the Singapore market was currently above US$200 a barrel and had previously climbed as high as US$240 a barrel, more than double normal levels.

However, Thailand’s retail oil prices had risen less than those of neighbouring countries in the region.

Retail diesel in Thailand stood at 38.90 baht per litre, up 30%, while Gasohol 95 E10 stood at 41.05 baht per litre, up 34% from before the crisis.

He said that was a relatively limited increase compared with the more than 200% jump in world market prices.

In Malaysia, retail diesel prices had risen by as much as 90%, with the average price reaching about 45.41 baht per litre. Singapore had also recorded an increase of more than 54%.

Meanwhile, Vietnam, the Philippines and Lao PDR had faced sharp fuel price rises, with retail prices in those countries surging by more than 100%.

Management of oil traders’ marketing margins in Thailand remained within an average range of plus or minus 2 baht per litre, except on some days when global oil prices were highly volatile.

The Energy Ministry also stressed stricter stock inspections and shortage-prevention measures.

It had intensified anti-hoarding measures by requiring Section 7 fuel traders to report their stock levels and prices to the Department of Energy Business every day by 6pm.

The ministry was also using the Stockpile system and an API Gateway to monitor real-time oil inventories at 53 depots nationwide.

He added that authorities had reported arrests involving the unauthorised storage of oil in Saraburi, where more than 18,000 litres were found, and in Ayutthaya, where more than 60 oil containers were discovered.

The inspections were intended to deter wrongdoing during the crisis.

To promote the use of alternative fuels, the Energy Ministry was encouraging the use of B20, which is 5 baht per litre cheaper than B7, to help operators and the fisheries sector.

Sales had already begun at Bangchak’s Phra Khanong depot and at PTTOR depots in Songkhla and Saraburi.

The ministry had also held discussions with relevant agencies, including oil companies and biodiesel producers, as well as the Office of Agricultural Economics and the Department of Internal Trade, to closely and continuously monitor output trends and palm oil stock volumes.

Asked about the status of the Oil Fuel Fund, Veerapat said the fund was now more than 42 billion baht in deficit after being used to keep oil prices in check, and the shortfall was likely to deepen.

At present, the deficit is widening by 1.3 billion baht a day. However, the government was trying to use various measures to manage oil prices and would, in the next phase, consider borrowing to boost the fund’s liquidity, along with possible cuts to part of the excise tax on oil.

“Although the Oil Fuel Fund remains in deficit, the government is considering tax measures and other mechanisms to keep energy prices manageable so that people can travel as smoothly as possible, especially during Songkran, when travel and fuel consumption are high.”

Asked about Thailand’s oil reserve levels, Veerapat said the country had enough oil reserves, including supplies in transit, to last for as long as 106 days if no additional supplies could be secured at all.

However, he said risks still needed to be monitored from a possible US attack on Iran’s Kharg Island and Houthi disruption in the Red Sea, which were the main factors currently putting pressure on energy prices.