Oil Fuel Fund set to borrow billions

Oil Fuel Fund set to borrow billions

An attendant fills a customer's tank at a Bangchak petrol station.
An attendant fills a customer's tank at a Bangchak petrol station.

The Oil Fuel Fund is expected to finish negotiations with banks this month as it looks to borrow heavily to boost its liquidity, says the Finance Ministry's deputy permanent secretary Theeraj Athanavanich.

Mr Theeraj said the fund is in talks with several commercial banks, including the state-run Government Savings Bank and Krungthai Bank, with regards to the borrowing. The negotiations are expected to be wrapped up this month.

The fund is in the red because of rising global oil prices. It needs to seek capital to boost its liquidity in case the price of oil increases further, and to deal with the expiration of the government's diesel excise tax reduction on May 20.

In February the cabinet agreed to cut the excise tax on diesel by 3 baht per litre for three months to help mitigate the impact of high energy prices.

The fund will seek to borrow 30 billion baht. The Public Debt Management Office has already added this borrowing in terms of its public debt management plan for the 2022 fiscal year.

The fund was in the red to the tune of 66.6 billion baht as of May 8, of which 33.2 billion baht is a loss in the fuel account and 33.4 billion baht in the liquefied petroleum gas account.

The government has introduced 10 measures to help targeted groups ease the burden of living costs, with a budget of 45.1 billion baht. The measures include a cap on the price of natural gas for vehicles at 15.5 baht per kilogramme for three months, starting from April.

A total of 157,000 qualified motorcycle taxi drivers will receive a discount on gasohol of 250 baht per month from May-July.

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