BANGKOK, THAILAND – Thailand’s interim government kept the retail diesel price fixed at 29.94 baht per liter, even though the actual market price was higher.
Price cap aimed at shielding daily life and transport
Acting Energy Minister Auttapol Rerkpiboon said on 9 March that the cap was intended to ease rising transport costs and reduce pressure on the cost of living. He linked the move to climbing global oil prices, which in an open market quickly showed up in pump prices and freight charges.
He stressed that higher international energy prices had already filtered through to the domestic economy. The government therefore intervened to slow this pass-through to consumers and businesses in the short term.
Oil Fuel Fund absorbs nearly 10 baht per liter
According to the acting minister, the subsidy averaged 9.57 baht per liter, causing the Oil Fuel Fund to lose around 700 million baht per day. This meant diesel at the pump was deliberately pushed below cost to curb immediate price increases along supply chains.
The intervention was framed as a temporary buffer rather than a permanent policy. Officials acknowledged that the financial burden on the fund was mounting quickly with every day the cap remained in force.
Fund reserves expected to last only about 15 days
Auttapol Rerkpiboon said the fund still had enough resources to sustain the measure for roughly 15 days. After that, the government planned to reassess the situation, including the option of taking on additional loans if subsidies were to continue.
He indicated that all options would be on the table in that review. Budget constraints and the pace of global oil price movements were expected to shape the decision.
Emergency decree considered to unlock state guarantees
The acting energy minister also raised the possibility that the government could act by emergency decree if the fund could no longer finance diesel support on its own. In that scenario, the aim would be to give the Finance Ministry the ability to guarantee loans for the fund.
Such guarantees would be used to secure new borrowing to sustain the subsidy. The measure would effectively shift more of the financial risk to the state in order to keep diesel prices capped.
Why diesel in Mae Hong Son jumped to about 40 baht
Responding to reports that diesel in remote areas such as Mae Hong Son had risen to about 40.50 baht per liter, Auttapol Rerkpiboon pointed to middlemen and higher transport costs. He said these factors explained why local pump prices diverged from the nationwide cap.
The minister argued that price differences showed a state-imposed cap alone did not automatically reach all regions where logistics and delivery routes were expensive. Remote locations remained more vulnerable to cost markups along the supply chain.
Direct purchasing planned for peripheral fuel stations
The Energy Ministry was examining whether to allow fuel stations in remote areas to buy directly from licensed oil traders. The goal was to reduce dependence on intermediaries and tighten control over final pump prices.
Officials hoped that cutting out middlemen would lower costs for stations in distant provinces. In turn, this could bring local diesel prices closer to the national ceiling.
Government warns against panic buying
Auttapol Rerkpiboon urged the public not to stock up on fuel.
“Thailand has sufficient supply and a diversified import system that should prevent shortages.”
said Auttapol Rerkpiboon, acting energy minister.
He called for calm, insisting that current measures were designed to stabilize both prices and supply. Authorities emphasized that panic buying could create artificial tightness in the market even when overall supplies were adequate.
Debate over the future of diesel subsidies
Commentary around the policy described the diesel cap as a short-term shield, while the losses in the Oil Fuel Fund underscored how costly stability at the pump had become. The discussion focused on the trade-off between immediate relief and long-term fiscal strain.
Observers raised three main options for the government: let the subsidies expire, continue borrowing to keep them in place, or shift to more targeted support for remote regions. The question remained which path would offer the most sustainable balance between protecting consumers and safeguarding public finances.