The government insists the state Oil Fund still has sufficient funding to subsidise retail diesel prices until March 31 and sees no urgent need to cut the excise tax on diesel.
Energy Minister Supattanapong Punmeechaow said the government has not yet considered additional borrowing for the state Oil Fund because it has enough funding to subsidise the cap on diesel prices at 30 baht per litre until March 31.
"The government closely monitors global oil prices, which are rising because of a world economic recovery and political tension in Europe," he said.
Regarding whether the government needs to secure additional borrowing for the state Oil Fund after March, Mr Supattanapong said the government plans to consider this issue later.
The National Energy Policy Council chaired by Prime Minister Prayut Chan-o-cha approved on Nov 5 last year the Oil Fund borrowing 30 billion baht to subsidise retail diesel prices.
The first batch of borrowing worth 20 billion baht is slated to be secured this month, with the second batch of 10 billion secured later once oil prices increase further.
The funds are meant to subsidise retail diesel prices, which are now capped at 30 baht per litre.
Mr Supattanapong said earlier the government expects the first batch of 20 billion baht to help cap diesel prices for a period of only four months.
The Energy Ministry reported as of Jan 16, the Oil Fund was 8.7 billion baht in the red.
Despite the government's struggle to deal with the higher cost of living, he said there has been no consideration of reducing the excise tax on diesel to keep its price lower.
Energy authorities currently impose an excise tax on diesel of 5.99 baht a litre, but the Oil Fuel Fund Office subsidises the levy by paying 3 baht per litre.
Excise taxes on gasoline and gasohol, a mix of ethanol and benzene, stand at 5.2-5.87 baht a litre.
E85, a type of gasohol with an 85% ethanol blend, is priced at the lowest rate of 0.97 baht a litre.
Mr Supattanapong said the government would rather focus on implementing measures to assist ordinary people and low income-earners, such as the "Khon La Khrueng" co-payment subsidy scheme.
Gen Prayut instructed the Finance Ministry to expedite the launch of the fourth phase of the scheme, which had previously been planned for March or April.
The fourth phase is expected to begin in the middle of February to mitigate the impact of the pandemic and ease the cost of living, government spokesman Thanakorn Wangboonkongchana said earlier.
Registration is scheduled to begin on Feb 14 and spending by registrants can commence on Feb 21, he said.
Mr Supattanapong said the government expects tourism to improve in the first quarter this year after the Centre for Covid-19 Situation Administration reinstated Test & Go registration for every country from Feb 1.