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SUNDAY, December 10, 2023

Thailand’s electric dreams and its impact on Oil Fuel Fund

Thailand’s electric dreams and its impact on Oil Fuel Fund
SUNDAY, June 04, 2023

Thailand’s transition to electric vehicles (EV) as part of its clean energy policies is presenting a tough challenge for the Oil Fuel Fund and its role in maintaining stable domestic prices

The Oil Fuel Fund has been working hard to keep the oil prices in the country stable, especially after the Russia-Ukraine war sparked severe global fluctuations in oil prices.

As a result, the fund has been overburdened with loans it has had to take to keep fuel prices affordable and reduce the burden on the general public. The Oil Fuel Fund’s coffers are now in the negative of approximately 22.92 billion baht.

However, the government’s support for the EV industry, especially its 30@30 policy (increasing EV manufacturing to 30% by 2030) will invariably have an impact on the consumption of conventional fossil fuel.

Subsequently, this shift in demand will also affect the future of revenue collection from fuel users.

A study conducted by the Department of Energy Business shows a boost in EVs will see a significant drop in the consumption of petrol and diesel – an impact that is expected to be noticeable in the next decade or so.

This, in turn, will have other implications in the management of the Oil Fuel Fund and the stability of fuel prices in the future.

To address these challenges, the Oil Fuel Fund Management Office will need to monitor the situation closely and develop strategies to adapt to the wider adoption of EVs.

Its main job will be to ensure the role of the Oil Fuel Fund aligns with the changing landscape of fuel consumption. The rapid growth of the EV industry and increasing consumer interest may lead to a quicker-than-expected decline in the use of internal combustion engines.

This shift in the energy landscape is also in line with Thailand’s aim to achieve carbon neutrality by 2050 and net-zero emissions by 2065.