The retail price of diesel in Greater Bangkok will remain capped at 32 baht per litre, as the government has tried to continue its energy subsidy measures to help alleviate people's hardship and reduce their cost of living. According to the director of the Oil Fuel Fund Office (Offo), Wisak Watanasap, the board on Monday agreed to continue capping the retail diesel price at 32 baht per litre for another week.
The government earlier decided to allow the price of diesel, which had been capped since October 2021, to gradually increase starting from early this month, with the price expected to increase to 33 baht per litre as of Monday morning. Mr Wisak said the Offo is scheduled to reassess the direction of the retail diesel price this Friday.
The actual retail price of diesel is now quoted at 43.5 baht per litre in Greater Bangkok including tax and levy collection. According to Offo, the state diesel subsidy has now risen to 11.35 baht per litre from 9.55 baht per litre a week ago and from 9.57 baht per litre two weeks ago, as global oil prices rise.
As of Sunday, the Oil Fuel Fund, which provides the subsidy, was 66.6 billion baht in the red, 33.2 billion baht of which was for oil and 33.4 billion baht of which was for cooking gas. Mr Wisak said Offo is also accelerating obtaining a 20-billion-baht loan, possibly by June, to maintain the fund's liquidity.
State-run Government Savings Bank and Krungthai Bank are on Offo's shortlist as potential loan providers. Last month, the cabinet approved an additional loan of 10 billion baht on top of a former loan to keep the fund operational.
Mr Wisak said that global oil prices traditionally decline after the end of the winter season, but they are still on the rise due to the protracted Russia-Ukraine war. The Oil Fuel Fund currently spends a combined 860 billion baht per day to subside energy prices, 781 million baht of which is used to subsidise oil prices and 78.8 billion for the LPG price subsidy.
Wattanapong Kurovat, director-general of the Energy Policy and Planning Office, said energy authorities are expected to discuss the possibility of lowering the content of methyl ester (ME), also known as purified biodiesel (B100), in biodiesel from 5% or 5 baht now. Costly ME is now quoted at 62.74 baht per litre, doubling the diesel prices. Every 1% reduction in ME content in diesel could lower the retail price by 0.25 baht per litre.
The new proportion of ME content in diesel will not be confirmed until this Friday. Deputy Prime Minister and Energy Minister Supattanapong Punmeechaow said the authorities are planning to lower electricity tariffs by adding up long-term contract purchases of liquefied natural gas from costly purchases in the spot market.
Sourse : Bangkok Post
May 21, 2022