Five measures proposed to rescue Thailand’s Oil Fuel Fund
Thailand’s oil fund had a 103.561-billion-baht deficit on October 18, prompting proposals for refinery price cuts and support for biofuels.
- Proposing a fuel excise tax cut of 1–2 baht per litre and continuing reductions in refinery-gate prices to lower fuel costs.
- Encouraging the use of biofuels (E20 gasohol and B20 diesel) by freezing their prices, widening discounts, and launching promotional campaigns.
- Calling for an accelerated reform of the national energy-price structure to make prices fairer and more responsive to market conditions.
- These measures are intended to rescue the Oil Fuel Fund from its 103.5 billion baht deficit and are being considered as an alternative to further borrowing.
Energy Minister Akanat Promphan has been presented with five urgent proposals, including fuel excise tax cuts of 1–2 baht a litre, to shore up Thailand’s Oil Fuel Fund before further borrowing is considered.
The report, published on October 22, 2026, said the proposals had also been submitted to Energy permanent secretary Chantanon Wannakejohn and were expected to be considered soon.
The Oil Fuel Fund’s deficit stood at 103.561 billion baht as of October 18. This comprised a 62.359-billion-baht deficit in its oil account and a 41.202-billion-baht deficit in its liquefied petroleum gas (LPG) account.
Five proposals target fuel taxes, refinery prices and biofuels
The proposed measures seek to contain the fund’s financial losses while cushioning fuel costs and encouraging greater use of domestically produced biofuels.
1. Hold biofuel prices steady and widen price incentives. The fund would prioritise freezing biofuel prices, targeting a discount of up to 8 baht a litre against other fuels to encourage motorists to switch. Prices of other fuels would move with world markets to protect the fund’s finances. If global prices fell, subsidies for the petrol group would also be reduced to help restore the fund’s position.
2. Launch campaigns promoting E20 and B20. Ministry agencies, including the Department of Energy Business, would coordinate with carmakers and fuel retailers to encourage greater use of E20 gasohol and B20 diesel. The source said the campaigns would help ease living costs and support Thai agricultural products.
3. Seek an excise tax cut of 1–2 baht a litre. The Finance Ministry would be asked to consider reducing fuel excise tax to cushion retail prices as global oil costs rise. The source said the fund’s cash flow was weak and its subsidies were effectively covering the tax burden.
Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas had initially supported the idea of cutting taxes on biofuels, according to the source. The source believed Ekniti’s commitments at the previous week’s International Monetary Fund–World Bank Group Annual Meetings 2026 had delayed further consideration.
4. Continue reductions in refinery-gate prices. The Energy Policy and Planning Office would be asked to assess further reductions after the existing diesel refinery-gate discount of 4 baht a litre expires on October 31. Monitoring of refinery costs suggested there could be room for further cuts in November, the source said, although the office would need to determine an appropriate amount.
5. Accelerate energy-price reform. The ministry would be urged to complete its ongoing review of the energy-price structure as quickly as possible, with the aim of making prices fairer and better suited to changed market conditions.
“All five measures should be accelerated, particularly publicity encouraging people to use E20 gasohol and B20 diesel, because this can be done immediately and would also strengthen domestic energy security,” the source said.
Fuel prices and fund contributions changed on October 21
The source said the Middle East war had driven another increase in global oil prices on October 20, prompting the Oil Fuel Fund Management Committee to approve retail price rises of 0.60 baht a litre for B7 diesel, petrol and E10 gasohol 95 and 91.
The retail increases and revised fund contribution rates took effect on October 21. Prices of E20, E85 and B20 remained unchanged.
The changes were as follows, with all amounts expressed in baht per litre:
- B7 diesel: The subsidy increased by 0.69 baht to 2.41 baht. The retail price rose to 43.54 baht.
- B20 diesel: The subsidy increased by 1.08 baht to 7.63 baht, while the retail price remained unchanged.
- Premium diesel: The fund collected a levy of 1.50 baht.
- Petrol: The levy fell by 0.29 baht to 6.61 baht. The retail price rose to 51.03 baht.
- E10 gasohol 95 and 91: The subsidy for each grade increased by 0.22 baht to 0.28 baht. Retail prices rose to 42.04 baht for gasohol 95 and 41.67 baht for gasohol 91.
- E20 gasohol: The subsidy increased by 0.69 baht to 4.91 baht, with the retail price unchanged.
- E85 gasohol: The subsidy increased by 0.22 baht to 1.62 baht, with the retail price unchanged.
Borrowing remains a last resort
Holding E20 and B20 prices steady widened their discounts to 6.35 baht a litre against E10 gasohol 95 and B7 diesel, respectively.
The source said the price incentives were intended to ease motorists’ living costs while supporting domestic biofuels and farmers supplying ethanol feedstocks and palm oil.
The retail price increases were necessary to slow the weekly deterioration in the fund’s finances and preserve its ability to support domestic fuel prices, the source said.
“A fund deficit exceeding 100 billion baht is a serious problem. If we cannot manage the fund and retail prices, we will have to borrow more. But that would truly be a last resort because it would affect the country’s public debt,” the source said.
