Oil Fuel Fund ready to repay THB1.2 billion debt due in November

The Office of the Oil Fuel Fund has arranged 1.2 billion baht to pay back the first batch of debts to financial institutions due in November, despite the fund being 111.66 billion baht in deficit as of July 28, office director Wisak Watanasap said on Friday.

The total deficit in the oil account is 64.06 billion baht and 47.59 billion baht in the liquefied petroleum gas (LPG) account, he said.

The fund has been subsidising the retail price of diesel, under the government’s policy of capping the fuel price in a bid to help alleviate people’s financial burden. The measure has been extended every three months several times.

Wisak said the current diesel subsidy is at around 0.4 baht per litre to keep the retail price under 33 baht per litre. The measure will run until October this year, and will cost the fund around 26.73 million baht per day.

The Cabinet, however, prohibited the fund from subsidising more than 2 baht per litre.

Wisak said that the debt due in November includes 1 billion baht in capital and around 200 million baht in interest.

The Oil Fuel Fund had borrowed some 105.33 billion baht as fund to stabilise the country’s fuel prices, for which the Finance Ministry acted as a guarantor, he added. 

Wisak said the fund would still monitor the energy situation closely after October 31, when the subsidy measure expires. It is expected that global energy prices will rise again at the start of winter. Furthermore, the ongoing geopolitical tensions between the United States and China could also affect Thailand’s imports due to higher fuel prices, he added.