Vehicles line up to fill their tanks at a gas station with a fuel price display on Tuesday. (Photo: Nutthawat Wicheanbut)
The National Energy Policy Committee (NEPC) decided on Wednesday to remove the 40 billion baht cap on loans to support the Petroleum Fund following the Russian invasion of Ukraine.
Kulit Sombatsiri, permanent secretary for energy, said the decision will give the government more leeway to deal with soaring oil prices.
The decision taken at the NEPC meeting chaired by Prime Minister Prayut Chan-o-cha will be submitted for cabinet approval next week.
The government uses the Petroleum Fund to help manage energy prices, both oil and gas. The lending ceiling was set at 40 billion baht to ease the public burden.
The decision came as the government feels the heat of rising oil prices in the global market. The situation has weighed on energy consumption in the country.
Retail petrol-alcohol prices almost exceeded 40 baht per liter on Wednesday, while retail diesel prices remained at 29.99 baht per litre. The fund is being used to cap diesel prices below 30 baht per liter to offset soaring transport costs.
The fund has currently posted losses of 24 billion baht, according to data from the Petroleum Fund office on Sunday.
Although a lending cap may not be enforced, Kulit said the government would try to keep it below the 40 billion baht limit, depending on the energy situation.
The NEPC had explored different oil scenarios and measures to handle the situation based on a global price range from US$100 to the worst case of $150.
Details of the matter will be made public on Friday by Deputy Prime Minister and Energy Minister Supattanapong Punmeechaow.
General Prayut said after the meeting that the government would try to keep diesel prices below 30 baht for as long as it could. But the price cap would be reconsidered if oil prices showed no signs of falling, Kulit added.
Global oil prices rose to their highest level since July 2008 on Monday, with Brent at $139.13 and WTI at $130.50 after the United States and its European allies considered an import ban in coming from Russia.
WTI and Brent prices had fallen to $119.58 and $124.16, respectively, as of 7:30 p.m. Wednesday.