The government will cap the price of diesel at 28 baht per litre from December to March by limiting biodiesel content.
The Energy Policy Administration Committee (EPAC) on Wednesday resolved to limit the amount of methyl ester (ME), known as biodiesel, in high speed diesel to 7% (B7 diesel) and suspend production of 10% (B10) and 20% (B20) diesel during the four months.
The reference price of ME stood at 46.88 baht per litre on Wednesday and the pump price of B7 diesel was 28.84 baht per litre in Bangkok and its vicinity.
Wattanapong Kurovat, director-general of the Energy Policy and Planning Office, said the move would result in the retail diesel price being limited to 28 baht per litre in Greater Bangkok.
"We have discussed this with truck operators and the private sector and they agree with it," he said.
Truck operators have been campaigning for the price of diesel to be capped at 25 baht per litre for the next year.
The EPAC, chaired by Energy Minister Supattanapong Punmeechaow, also resolved that oil traders should limit their oil trade margin to 1.4 baht per litre, down from 1.8-2.0 baht per litre.
The decision was in response to the Land Transport Federation of Thailand's recent rallies and demand the diesel price be kept down, and threat to raise freight charges by 10% from Dec 1.
Prime Minister and Defence Minister Prayut Chan-o-cha earlier told the armed forces to prepare trucks to transport freight in the event hauliers went on strike.