The government will cap diesel prices at 30 baht per litre until the end of the month to help reduce living costs for consumers as global oil prices rise, Energy Minister Supattanapong Punmeechaow said on Monday.
The short-term support could be extended if necessary, Deputy Prime Minister Supattanapong , who is also energy minister, told a news conference.
"If global oil prices keep increasing, we still have room to manoeuvre," he said, adding prices of some diesel types would be lowered from Tuesday and some from Oct 11.
The subsidy will be financed by an oil fund worth 11 billion baht and a loan if needed, Mr Supattanapong said.
Currently, the government has also frozen liquefied petroleum gas prices (LPG) until the end of January.
Government subsidies have helped keep headline inflation low, at minus 0.02% in August.
The government has also introduced a series of measures to support consumers and businesses affected by the pandemic.
After a hit from the outbreak and tougher containment measures imposed in July and August, the economy is improving with higher exports and consumption, Mr Supattanapong said.
"Q4 should be a lot better and full-year growth is likely to be positive," he said.
Last week, the central bank maintained its 2021 economic growth forecast at 0.7%, while the finance minister expects 1.3% growth.