Oil Fuel Fund asks for liquidity boost
Office looks for a lifeline as it continues to subsidise rising diesel costs
The Oil Fuel Fund Office is asking the government to inject money into the fund from its central budget to increase its liquidity as it continues to subsidise the price of diesel, says office director Wisak Watanasap.
The request is in line with Section 6 of the Oil Fund Act allowing the government to allocate money to the fund in an emergency, he said.
The office is in talks with financial institutions to seek loans to boost its liquidity. However, the talks have yet to be concluded as the financial institutions need the office to provide a clear plan of debt serviceability, Mr Wisak said.
The cabinet recently allowed the fund to borrow 30 billion baht to prop up its liquidity as it is 70 billion baht in debt from subsidising the domestic price of diesel.
The fund has incoming cash of 2 billion baht per month from contributions from retail oil operators, but is spending 7 billion baht per month on the oil subsidy.
The situation is still manageable because the fund has 12 billion baht deposited at the Finance Ministry, he said.
A total of 66 million litres of diesel is used in Thailand daily. The global crude oil price is expected to surge when China loosens its pandemic lockdowns. The current Dubai oil price is US$107-108 per barrel.
Earlier the Excise Department said it expected its revenue collection in fiscal 2022 to miss its target of 590 billion baht by around 40 billion as the government’s diesel excise tax cuts are forecast to reduce its revenue by around 37 billion.
Nutthakorn Utensute, principal adviser on excise control systems for the department, said revenue could fall to between 510-530 billion baht given the unfavourable economic conditions.