Oil Fuel Fund asks for liquidity boost

Oil Fuel Fund asks for liquidity boost

Office looks for a lifeline as it continues to subsidise rising diesel costs

A pickup refuels at a petrol station. The consumption of diesel in Thailand totals 66 million litres daily.
A pickup refuels at a petrol station. The consumption of diesel in Thailand totals 66 million litres daily.

The Oil Fuel Fund Office is asking the government to inject money into the fund from its central budget to increase its liquidity as it continues to subsidise the price of diesel, says office director Wisak Watanasap.

The request is in line with Section 6 of the Oil Fund Act allowing the government to allocate money to the fund in an emergency, he said.

The office is in talks with financial institutions to seek loans to boost its liquidity. However, the talks have yet to be concluded as the financial institutions need the office to provide a clear plan of debt serviceability, Mr Wisak said.

The cabinet recently allowed the fund to borrow 30 billion baht to prop up its liquidity as it is 70 billion baht in debt from subsidising the domestic price of diesel.

The fund has incoming cash of 2 billion baht per month from contributions from retail oil operators, but is spending 7 billion baht per month on the oil subsidy.

The situation is still manageable because the fund has 12 billion baht deposited at the Finance Ministry, he said.

A total of 66 million litres of diesel is used in Thailand daily. The global crude oil price is expected to surge when China loosens its pandemic lockdowns. The current Dubai oil price is US$107-108 per barrel.

Earlier the Excise Department said it expected its revenue collection in fiscal 2022 to miss its target of 590 billion baht by around 40 billion as the government's diesel excise tax cuts are forecast to reduce its revenue by around 37 billion.

Nutthakorn Utensute, principal adviser on excise control systems for the department, said revenue could fall to between 510-530 billion baht given the unfavourable economic conditions.

Do you like the content of this article?

Bitcoin hints at a bottom, but it may be different this time

It’s a perennial exercise whenever an asset is mired in a prolonged and deep drawdown: People look at the charts, they go over this or that indicator and they get their checklists out to try to figure out when it might find a floor. For Bitcoin, there’s plenty of such action happening right now, with technical signals that in the past have suggested just such a formation.


+1,917 Covid cases

Tuesday Covid bulletin: Deaths remain unchanged at 18 while new cases drop to 1,917.


Precautionary alert

Officials nationwide have been told to prepare for rising numbers of coronavirus cases, but health chiefs say there's no need to increase the Covid-19 alert level.