The domestic price of diesel is slated to fall by 0.5 baht a litre next Wednesday, down from 34.44 baht a litre, as global crude oil prices keep decreasing, says the Oil Fuel Fund Office (Offo).
Despite lower crude oil prices, officials are not cutting the diesel price immediately, waiting for oil stocks to be sold, which usually takes around seven days, according to Offo.
This marks the second diesel price dip this month. Last week officials determined the price would decrease to 34.44 baht a litre on Feb 15, down from 34.94 baht a litre.
Another reduction of 0.5 baht a litre is scheduled for Feb 22, said Wisak Watanasap, director of Offo.
The decrease stems from a drop in the diesel reference price in Singapore from US$135.53 per barrel on average in November last year to $116.12 per barrel in January. Last week, the price continued to slide to $106 per barrel, he said.
Energy authorities no longer allocate money from the fund to subsidise the price of diesel, but the price remains low because the diesel excise tax of five baht has been waived and the waiver is valid until May 20.
In 2022 a global energy price crisis, mainly caused by the impact of the Russia-Ukraine war, caused Offo to spend money from the Oil Fuel Fund to subsidise the diesel price at 14 baht a litre, costing the fund 20 billion baht a month.
The authorities requested a 30-billion-baht loan to support the dwindling fund, which was running a loss of nearly 130 billion baht.
The situation led national oil and gas conglomerate PTT Plc to allocate 3 billion baht to help the government support the fund.
The company operates oil refineries, with the refined oil accounting for 77% of the country's total capacity.
As global oil prices have eased, the fund was 109 billion baht in the red as of Feb 12.
The amount was attributed to spending of 62.9 billion baht to subsidise diesel prices and 45.7 billion to subsidise liquefied petroleum gas (LPG) prices.
The loss is shrinking because Offo collects a levy worth 3 billion baht a week from diesel users to support the fund.
Ponchai Jirakunptsarn, chief of Offo's policy and strategy department, said officials will decide on March 1 whether to increase the LPG price by one baht per kilogramme, leading to a hike in the LPG price to 423 baht per 15kg cylinder, up from 408 baht per cylinder.
The market price of LPG is estimated at 480 baht per cylinder.