Government to Adjust Diesel Price Cap Amid Fuel Subsidy Pressures
The government confirms a diesel price increase of no more than 1 baht per litre, effective 18 March, with a new cap set at 33 baht to manage subsidies
- The Thai government is raising the diesel price cap to 33 baht per litre, an increase from the previous 29.94 baht, with an initial price hike of no more than 1 baht effective March 18.
- This decision is driven by significant financial strain on the Oil Fuel Fund, which is facing a deficit of over 12 billion baht and has restricted borrowing capacity.
- To alleviate the financial burden on the transport and agricultural sectors, the government is also reviewing the pricing of B20 biodiesel to make it substantially cheaper than standard diesel.
The government confirms a diesel price increase of no more than 1 baht per litre, effective 18 March, with a new cap set at 33 baht to manage subsidies.
The Thai government is set to raise the domestic retail price of diesel starting Wednesday, 18 March, as it adjusts the existing price-fixing ceiling to manage national energy funds.
Deputy Prime Minister and Transport Minister Phiphat Ratchakitprakarn confirmed that the new price ceiling for diesel will be set at 33 baht per litre, an increase from the previous cap of 29.94 baht.
Phiphat reassured the public that the immediate price adjustment on 18 March would be incremental, rising by no more than 1 baht per litre.
He further noted that the new 33-baht ceiling remains lower than the nearly 35-baht level reached under the previous administration.
Addressing concerns regarding recent fuel shortages at some petrol stations, the Minister stated that a high-level meeting led by Prime Minister and Interior Minister Anutin Charnvirakul was held on 16 March.
PTT Public Company Limited and the Ministry of Energy have confirmed that Thailand maintains a fuel reserve sufficient for 96 days.
"I can confirm there is no fuel shortage," Phiphat stated. "At present, we have no less than 50 per cent of our fuel supply stationed offshore. Contracts have been signed to secure these supplies, and we are negotiating with other sources, including Russia, to bolster our reserves."
The Minister attributed the recent "dry pumps" at approximately 20,000 smaller, independent stations to logistics and transport delays.
This led to a surge of motorists flocking to larger urban stations, creating the appearance of a broader shortage.
The price adjustment comes as the Oil Fuel Fund faces significant financial strain, reporting a deficit of over 12 billion baht as of 16 March. Under the current caretaker government, borrowing for the fund is restricted to 40 billion baht.
Phiphat indicated that if the fund's requirements exceed this limit before a new cabinet is officially sworn in, the government may need to seek a special dispensation from the Election Commission (EC) to secure further state-guaranteed loans.
In a move to support the transport and agricultural sectors, the government is also reviewing the pricing structure for B20 biodiesel. The aim is to price B20 approximately 4 to 5 baht cheaper than B7 diesel to alleviate the financial burden on industrial and farming operations.
