The pump price of diesel may exceed 30 baht a litre if crude prices reach US$90 a barrel because the marketing margin is already low, Energy Minister Siri Jirapongphan warned on Wednesday.
The government would be able to cap the price at 30 baht a litre until the end of this year as long as the crude price remained around $85 a barrel, the highest in four years, the minister said.
But if crude hits $90, the diesel price would have be over 30 baht per litre to protect the government's oil fund. Crude could even reach $100 per barrel next month as the United States pressures allies to stop importing oil from Iran from Nov 4.
"The oil fund has raised its subsidy for diesel from 30 satang to 60 satang per litre. If the price of crude keeps rising, the subsidy may rise to one baht per litre. The oil fund has 25,142 million baht. If crude exceeds $90 per barrel the diesel price may be raised beyond 30 baht a litre at times," the energy minister said.
Crude prices could be very volatile in the week before and after Nov 4, he said.
Mr Siri thanked oil companies for helping cap the diesel price with a low marketing margin of 1.12 baht per litre.
He also advised transport operators to switch to B20 biodiesel which, he said, was 3 baht per litre cheaper.
The retail price of diesel was 29.89 baht a litre in Bangkok and its vicinity on Wednesday, and already over 30 baht in provinces farther out.