Loan guarantees okayed for Oil Fund

Loan guarantees okayed for Oil Fund

A cabinet proposal for the Ministry of Finance to provide loan guarantees worth up to 150 billion baht to the Oil Fuel Fund has won approval in the House of Representatives, despite criticism expressed in a House debate prior to Wednesday's vote.

The voting was 239 in favour, 166 against and three abstentions, while three other MPs did not join the vote.

Move Forward Party (MFP) list-MP Sirikanya Tansakun described the proposal as an attempt by the government to ask the public to guarantee up to 150 billion baht in loans without specifying the purposes of the loans, how they would be obtained, or for how long the country will have to repay these debts.

Pisit Leeahtam, a list-MP for the Democrat Party, accused the government of failing to act quickly enough in its handling of the oil fund's liquidity crisis, saying it should have brought the matter to the House for brainstorming at an earlier date.

He disagreed with the government's decision to allow the gross refinery margin (GRM) of the six old oil refineries to remain as high as 2% to 3%, saying a proper margin should be around 1.50 baht per litre.

Depreciation expenses, a key part of how the GRM is calculated, should have been mostly excluded long ago as these are relatively low for the old refineries, he said.

Energy Minister Supattanapong Punmeechaow said the government had to swiftly start subsidising the energy price from last year.

If it had not acted as quickly as it did, prices could have jumped to 40 to 50 baht per litre from the beginning of this year.

The liquefied petroleum gas (LPG) price could have climbed to 525 baht per 15kg cylinder, which could have further rocked the economy, he said.

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