The board of the Oil Fuel Fund Office (OFFO) has approved a 2-baht reduction of the price of diesel. The move came in response to a Cabinet resolution to slash the excise rate on diesel oil.
OFFO Director Wisak Watanasap revealed that the most recent OFFO board meeting discussed management of the retail price of diesel fuel. The meeting was presided over by Deputy Prime Minister and Energy Minister Supattanapong Punmeechaow. The board acknowledged the Cabinet’s reduction of the diesel excise from 5.99 baht per liter to 3.20 baht per liter. The reduction will remain in effect until May of this year.
The OFFO board resolved to reduce the price of diesel fuel by 2 baht per liter to alleviate the public burden. The retail price of diesel has subsequently dropped to 27 baht, 94 satang per liter. The remaining difference will be used to add liquidity to the Oil Fund so it can keep diesel from exceeding 30 baht per liter.
Wisak noted that global oil prices are still on the rise and that the Oil Fund is currently spending 8.191 billion baht per month, 6.117 billion of which is being used to subsidize oil prices and 2.075 billion for the LPG price.
The Federation of Thai Industries (FTI) recently expressed concerns that global oil prices may continue to surge, reaching US$100 a barrel this year. High fuel prices could negatively affect many sectors across the pandemic-battered economy.
The first factor causing soaring fuel prices in Thailand stems from the rapid increase in demand for, and prices of, crude oil and refined oil in the global market.
Another factor leading to the fuel price hike is the ongoing conflict between Russia and Ukraine. Russia is the world’s second largest oil producer. The Kremlin may respond to the tensions by reducing oil and gas supplies, said Supant Mongkolsuthree, chairman of the FTI.