Fuel subsidies agreed for three months
The Energy Policy Administration Committee (Epac) has agreed to reduce a levy collection from gasoline and diesel users by another one baht and 60 satang per litre respectively from Wednesday.
The levy reduction is part of urgent measures to tackle a short-term price hike in global oil after two refineries in Saudi Arabia were attacked on Saturday.
Epac expects local motorists to see no effects from the price increase.
The committee plans to use 2.4-2.5 billion baht from the state Oil Fund to subsidise the oil price reduction for three months, spending 813 million baht a month.
"The amount of cash depends on movements in the Middle East and global oil prices," said Sontirat Sontijirawong, energy minister and chairman of Epac. "We expect this measure to help motorists deal with the oil price hike and hope the situation in the Middle East will return to normal soon."
Epac reports that the Oil Fund has 39.04 billion baht, taking in 1.2 billion baht a month through a levy collected from petrol users. The fund spends 31 million baht a month to subsidise diesel, including biodiesel.
The Dubai crude oil price stood at US$65.25 a barrel on Tuesday.
"Epac expects crude oil prices to stay at $70 per barrel for the remainder of this year," Mr Sontirat said. "The Oil Fund can subsidise prices at this level for a year. If global crude oil prices increase above $70 per barrel, Epac will consider other measures to maintain local oil prices. But some of that price increase would be passed on to local motorists."
He said Epac aims to collect more levies for the Oil Fund to stabilise the country's energy prices once global crude oil prices decline below $60 a barrel.
Epac has yet to increase the country's crude oil reserves, totalling 6.41 billion litres, which would last 54 days at current consumption levels.
Reserves for liquefied petroleum gas are at 23 days, totalling 131 million kilogrammes.