Fuel prices expected to rise – slightly – as subsidies expire on Jan. 31
Energy Minister Peeraphan Salirathaviphak says discussions on government fuel subsidies are ongoing with only one week before the three-month gasohol price cuts expire on January 31.
Fuel prices are expected to increase slightly in the next two weeks but remain lower than in early November when support measures were implemented. However, fluctuations in global oil prices this week could impact pump prices in Thailand. However, the Pheu Thai-led government is unlikely to allow a rise of 1 baht per litre under its commitment to relieve living-cost burdens.
In November, the price of gasohol 91 was cut by 2.50 baht per litre, gasohol 95 by 1 baht per litre, E20 and E85 petrol by 80 satang per litre.
The decision on whether to extend the gasohol subsidy will depend on the financial status of the Oil Fund – which still has capacity.
The Oil Fund, which subsidises fuel prices, has built up a deficit of 83.02 billion baht as of January 21, partly from spending about 12 million baht per day to reduce gasohol prices. The deficit is divided into 36.59 billion baht for oil accounts and 46.43 billion baht for liquefied petroleum gas (LPG). The fund has also received a loan of 75 billion baht.
Sources say the Finance Ministry is unlikely to cut excise tax on fuel again, which means that any move to extend price cuts will come from the Oil Fund.
The Cabinet on January 16 approved a tax cut of 1 baht per litre of diesel for three months, resulting in estimated losses of around 6 billion baht.
The government aims to provide low-price diesel for farmers and fishermen, though the price is yet to be determined.
