Motorists will see another dip in diesel prices to around 33.50 baht a litre next week, down from 33.94 baht, partly attributed to falling global crude oil prices, says the Oil Fuel Fund Office (Offo).
The new price, scheduled to take effect on March 24, is the third in a series of reductions made since early February when the retail price of diesel was 34.94 baht.
The Platts reference price for diesel plunged to US$103 a barrel on average in February, from $133 in January, and was at $102 on Friday, said Wisak Watanasap, director of the office.
Another factor keeping the domestic diesel price low is the waiver of the diesel excise tax of five baht a litre. It was scheduled to end on May 20, but the cabinet extended the period to July 20.
With less pressure from global energy prices, diesel prices are no longer subsidised through the Oil Fuel Fund, which will now focus on paying down large debts accumulated during the surge in global oil prices.
The office expects the fund to turn around from a loss and reach a healthy level of 40 billion baht in the black.
Various factors, including Russia’s plan to cut oil production, may cause fluctuations in global crude oil prices, according to Mr Wisak.
The Oil Fuel Fund’s loss has been gradually declining, from 130 billion baht in January to 99.6 billion as of Friday.
The office collects levies worth 3 billion baht a week from diesel users to support the fund, said Mr Wisak.
Earlier, authorities requested a 30-billion-baht loan to support the fund, which was shelling out 20 billion baht a month to subsidise diesel prices, by as much as 14 baht a litre, during the global oil price surge.
Though the debt of 30 billion baht was settled, the office is expected to approve another loan request of 20 billion to pay back money owed to oil traders, said Pornchai Jirakulpisan, head for policy and strategy.
The cabinet set a maximum of 150 billion baht in loans for the energy price subsidy programme.
The office has also decided to continue subsidising liquefied petroleum gas price by maintaining the price at 423 baht per 15-kilogramme cylinder until the end of June.