Gasohol users get a financial lifeline

Motorists refuel at a PTT petrol station on Nawamin Road, Bangkok, amid the surge in global oil prices. (Photo: Varuth Hirunyatheb)

The Oil Fuel Fund Office (Offo) has agreed to help gasohol users for the first time by reducing their contributions to the fund amid soaring fuel prices, as well as limiting the diesel price increase by one baht, to 33.94 baht a litre from Tuesday, to better manage the fund’s liquidity.

The assistance for motorists in the gasohol segment marks the first financial relief for them during the energy price crisis, which is driven by the Russia-Ukraine war.

Gasohol and gasoline consumption account for about a quarter of total fuel consumption in Thailand, while diesel makes up more than half of the total.

Gasohol 91 and 95 buyers are usually required to pay 1.01 baht per litre to support the fund, but under the new rate scheduled to take effect on Tuesday, the contribution falls to 0.09 baht per litre.

Offo on Monday also resolved to increase the gasohol E20 price subsidy to 0.94 baht per litre, up from 0.12 baht per litre.

New gasohol and diesel prices will be enforced for a week until Offo meets to discuss the global oil price situation again next Monday.

Offo director Wisak Watanasap said it was necessary to increase the cost of diesel as global oil prices continue to rise based on a mix of factors, including the easing of lockdown measures in China, the EU’s plan to ban oil imports from Russia, and falling stockpiles in the US Strategic Petroleum Reserve.

Dubai crude oil prices rose to US$112 a barrel on Monday, and diesel rose to $158.3 per barrel.

Mr Wisak said the Offo fund is 81.4 billion baht in the red, leading authorities to carefully manage the diesel price subsidy programme.

The latest one-baht increase in the price of diesel is expected to reduce the outflow of public money by about 60 million baht, or a decrease in the subsidy to 8.81 baht per litre from 9.18 baht per litre, including value-added tax.

The Offo board earlier decided to gradually increase the domestic diesel price on a weekly basis until it reaches a ceiling price of 35 baht a litre.

Authorities are also speeding up a process to obtain the first portion of a 20-billion-baht loan this month, aiming to maintain the fund’s liquidity.