Thai oil fund deficit may hit 100bn baht by early October

Thailand’s Oil Fuel Fund remained short of cash, with a deficit of about 92 billion baht widening by roughly 700 million baht a day, an Energy Ministry source told Thansettakij in a report published on September 22, 2026. Recent falls in oil prices had not been enough to improve the fund’s financial position. The Oil Fuel Fund’s deficit was expected to reach 100 billion baht by late September or early October 2026, the Energy Ministry source said. The fund needed to prepare plans to maintain liquidity, with borrowing among the main options.

Oil Fuel Fund’s 20bn baht loans already spent

The Energy Ministry source said the Oil Fuel Fund had borrowed 20 billion baht in its own right, separately from the borrowing facility previously established by the government under legislation. Two domestic commercial banks provided the money in two rounds of 10 billion baht each, and the entire amount had been used to repay existing debt.

“The 20 billion baht has all been used to repay debt. Another 10 billion baht borrowed last week has also been spent. To determine how large the borrowing facility needs to be, we first have to look at how much debt it must cover, which could take it to 100 billion baht. Drawing down the money is a separate matter, and it would probably be drawn in stages as before,” the Energy Ministry source said.

New Oil Fuel Fund borrowing could reach 100bn baht

The Oil Fuel Fund was considering a fresh borrowing facility that might need to reach around 100 billion baht to cover its obligations, the Energy Ministry source said. The proposal would help maintain diesel and petrol price support, but the amount would be reassessed after policy discussions with the new permanent secretary for energy and the energy minister, whose approach to fund management and energy prices would directly affect financing needs.

Any new Oil Fuel Fund borrowing would come from domestic commercial banks, with its structure depending on interest rates and conditions at the time, the Energy Ministry source said. A Finance Ministry guarantee might be needed, as in the previous round, while about 10 billion baht of principal remained outstanding on the fund’s existing debt. The fund still needed to pay interest on schedule to avoid its debt becoming non-performing.

Thansettakij reported that the Cabinet had approved extending the energy crisis response plan through 2029, from its previous end date of 2024. The plan retained a 30-baht-per-litre benchmark for diesel and petrol price-support measures, while raising the threshold for oil-price movements within one week from US$5 to US$10 a barrel to reflect increased market volatility.

Increasing the role of biofuels was another priority for reducing reliance on imports during a period of volatile global energy prices, the Energy Ministry source said. The pricing structures for biodiesel and ethanol still needed discussion because domestic feedstock costs remained high.

The Energy Ministry source also identified the Middle East conflict as a continuing concern, saying the fighting was likely to be prolonged and international fuel prices could remain elevated despite recent short-term declines.

Oil Fuel Fund weighs gradual cuts to price support

The Energy Ministry source said the Oil Fuel Fund could also gradually withdraw from price caps or reduce subsidy payments to slow the outflow of money. Either approach would push retail fuel prices higher, requiring an assessment of the impact on consumers and discussions with the government about targeted assistance or other relief.

“Borrowing is one option under the crisis plan. Another is to withdraw subsidies, but that could affect the public. We need to assess how much prices would rise and what measures the government could introduce to ease the impact,” the Energy Ministry source said of the Oil Fuel Fund’s options.

The Energy Ministry source said preparations for fresh borrowing needed to move quickly because the Oil Fuel Fund could not sustain energy subsidies over the long term. The amount and structure of the borrowing would be finalised after policy discussions with the ministry’s new leadership.

Source: Thansettakij