Energy Policy and Planning Office extends diesel subsidy until April

BANGKOK, 11 February 2011 (NNT) – The Energy Policy and Planning Office (EPPO) has decided to prolong the Oil Fund’s subsidy for diesel until April to help shoulder consumers’ burdens.

After his meeting with EPPO, Prime Minister Abhisit Vejjajiva indicated that the subsidization of diesel to keep the retail price below 30 THB per liter would be continued until the end of April this year at the cost of 5 billion THB per month. The decision was made to alleviate motorists’ suffering from the steadily rising oil prices, resulting from the long winter in the US and Europe, the political mayhem in Egypt and speculation by investors in the global oil market.

The Prime Minister noted that there is presently 23 billion THB in the Oil Fund reserve, which is adequate for the diesel subsidy. However, if the amount later drops to 10 billion THB, EPPO would review the matter and take appropriate action to ensure that no impact is incurred on the fund.

EPPO also agreed on the temporary policy to sell biodiesel B2 instead of B3 until March to ease the ongoing palm oil shortage in the country. Set to be enforced by the Ministry of Energy from next week onwards, it could help the Oil Fund save up to 600 million THB each month and reduce the consumption of biodiesel B100 by about 500,000 liters per day.

Meanwhile, the Energy Fund Administration Institute (EFAI) is expected to raise the subsidy for diesel by another 50 satang per liter as the current marketing margin is less than 1 THB per liter, relatively low. The move would safeguard distributors against losses.