Diesel prices will rise by 50 satang a litre on Saturday after an excise tax cut for the fuel expires, energy policy makers said on Friday.
The government has decided not to extend the one-baht reduction in the excise tax, meaning the new pump price for diesel would be 31.44 baht a litre, up from 30.44 baht on Friday. However, a subsidy of 50 satang has been approved to reduce the price to 30.94 baht.
The Energy Policy Administration Committee (Epac) reached the decision on Friday after the Oil Fuel Fund Office (Offo) said it would be willing to pay a partial subsidy if the excise tax break ended.
Diesel prices will probably have to rise further, given that the Oil Fuel Fund is already heavily in debt, said Veerapat Kiatfuengfoo, director-general of the Energy Policy and Planning Office and secretary to Epac. But increases would be gradual, he added.
The fund had an accumulated loss of 103.6 billion baht as of April 8, having spent 56.4 billion to subsidise diesel, gasohol and gasoline prices and 47.2 billion to subsidise liquefied natural gas prices.
Policy makers are trying to prevent the impact of oil price fluctuations, caused by geopolitical conflicts, especially in the Middle East, which is expected to drive up global crude oil prices, said Wisak Watanasap, the Offo director.
The current subsidy for diesel prices is 4.17 baht a litre. The excise tax will return to its normal rate of 6 baht a litre on Saturday.
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