Diesel to dip to 33.5 baht a litre next week

Motorists will see another dip in diesel prices to around 33.5 baht a litre next week, down from 33.94 baht, partly attributed to falling global crude oil prices, says the Oil Fuel Fund Office (Offo).

The new price, scheduled to take effect on March 24, is the third in a series of deductions made since early February when the retail price of diesel was 34.94 baht a litre.

Diesel under Platts reference prices plunged to US$103 a barrel on average in February, down from $133 in January, and declined to $102 yesterday, said Wisak Watanasap, director of the Offo.

Another factor keeping the domestic diesel price at low levels is the waiver of the diesel excise tax of five baht a litre.

The waiver was scheduled to end on May 20, but the cabinet extended the period to July 20.

With less pressure from global energy prices, the Offo no longer subsidises diesel prices through its Oil Fuel Fund, but will settle debts accumulated during the surge in global oil prices.

The office expects the fund to turn around from a loss and reach a healthy level of 40 billion baht.

Various factors, including Russia’s plan to cut oil production, may cause fluctuations in global crude oil prices, according to the Offo.

The Oil Fuel Fund’s loss has gradually declined, from 130 billion baht in January to 109 billion in early March.

As of yesterday, the loss totalled 99.6 billion baht.

The Offo collects a levy worth 3 billion baht a week from diesel users to support the fund, said Mr Wisak.

Earlier the authorities requested a 30-billion-baht loan to support the fund, which was decreased

Offo is expected to approve another loan request of 20 billion baht to pay back money owed to oil traders.

PORNCHAI JIRAKULPISAN HEAD FOR POLICY AND STRATEGY, OIL FUEL FUND OFFICE

dramatically as the Offo paid 20 billion a month to subsidise diesel prices, or around 14 baht a litre, during the global oil price surge.

Though the debt of 30 billion baht was settled, the Offo is expected to approve another loan request of 20 billion baht pay back money it owes to oil traders, said Pornchai Jirakulpisan, Offo’s head for policy and strategy.

The cabinet set a maximum of 150 billion baht in loans for the energy price subsidy programme.

The Offo also decided to subsidise the liquefied petroleum gas price by maintaining it at 423 baht per 15-kilogramme cylinder until the end of June.