Energy policymakers have made capping the retail diesel price at 29.99 baht per litre their top priority because global oil prices continue to rise every month, says Energy Minister Siri Jarapongphan.
"Our goal is to ease any impact to local consumers and business operators because diesel is used mainly for the country's transport and logistics systems," he said.
The ministry announced the measure yesterday after a meeting of the Energy Policy Administration Committee (Epac). Epac raised the issue at the previous meeting on Sept 5.
"The prices have fluctuated during July to September," Mr Siri said.
The Dubai and Brent crude oil prices have risen to more than US$80 a barrel.
Policymakers forecast prices to stay above $80-85 a barrel.
Crude oil prices have spiked and affected diesel prices in Asian countries, soaring to $95 a barrel. As a result, the diesel price in Thailand jumped by 3.82 baht per litre in a day.
Siri: Wants to ease consumer impact
Mr Siri said Epac approved maintaining the ceiling on retail diesel through a budget subsidy of the state Oil Fund.
The fund set aside a budget of 6 billion baht to subsidise the retail price by one baht per litre in the remaining months of the year.
Epac bases its calculations on a Dubai crude price of $85 a barrel.
"Policymakers are very concerned about the impact of steadily increasing global oil prices, in particular over the past three months," he said.
As of Friday, the retail diesel price was 29.79 baht a litre.
As a result of rising diesel prices, the B20 biodiesel is now the alternative fuel for transport and logistics systems. It is blended with 20% methyl ester or crude palm oil, though B7 is still available at petrol stations.
The price of B20 is lower than ordinary diesel by three baht per litre thanks to a surplus of palm oil production in the 2018/19 crop year.
"Higher fuel prices will increase transport and logistics costs and we are trying to ease up any pricing impacts," Mr Siri said.
He said big truck and public bus operators will not need to increase their transport and logistics fares once they switch to B20.
Meanwhile, the price of liquefied petroleum gas (LPG) has begun to rise from $600 per tonne of propane and $635 per tonne of butane as LPG demand in Europe and the US is decreasing.
As LPG prices rise, policymakers still subsidise the fuel for local consumers, also known as cooking gas, keeping the price at 363 baht per 15-kilogramme cylinder.