Pump prices of diesel will increase by 50 satang a litre on Saturday morning amid rising concern about the cost of subsidising the fuel, said Wisak Watanasap, director of the Oil Fuel Fund Office (Offo).
The new price of diesel B7, B10 and B20 will be 30.44 baht per litre. Premium diesel will cost 42.44 baht, according to announcements issued on Friday evening by the country’s two largest fuel retailers, PTT Oil and Retail Business and Bangchak Corp.
The board of the Oil Fuel Fund approved the increase earlier on Friday as debts incurred from subsidising fuel prices are approaching 100 billion baht, said Mr Wisak.
The fund is now 99.8 billion baht in the red from keeping diesel prices capped at 30 baht a litre since September last year, and from subsidising liquefied petroleum gas (LPG) prices for more than two years.
Offo has government authorisation to borrow up to 110 billion baht and has so far drawn down 75 billion from banks.
Mr Wisak said the board was concerned about rising global oil prices, which have been pushed up by conflicts in the Middle East and Ukraine. Benchmark Brent crude topped $90 a barrel this week for the first time since September.
Oil prices are likely to stay high and the fund is unlikely to be able to maintain price caps for much longer, said Mr Wisak.
The board decided to reduce the diesel subsidy to motorists by 20 satang to 4.57 baht per litre. It continues to explore other options to help motorists deal with rising fuel costs.
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