MPC freezes diesel prices at 32 baht per liter for another week until 22nd May after the Cabinet renews the tax reduction to 5 baht/liter. The oil fund is negative at about 72 billion baht, fearing a hundred billion baht at the end of the year.
On May 18th, 2022, Mr. Kulit Sombatsiri, Permanent Secretary, Ministry of Energy Revealed after the meeting of the Petroleum Fund Management Committee (KORN) that the meeting agreed to maintain the price of diesel fuel in the country at 32 baht per litre for another week until Sunday, May 22, 21. Still Frame the price of diesel fuel not to exceed 35 baht per liter. However, the 5 baht reduction of excise tax on diesel fuel for a period of 2 months until May 20th, the said amount was not used to reduce the retail price. But it is used to support the selling price of diesel fuel to be around 32-35 baht per liter for the longest time.
Currently, the Oil Fund is negative at about 72 billion baht, which is used to subsidize diesel fuel about 38 billion baht.
“The trend of oil prices is unlikely to decrease during this month Oil prices are likely to be in the range of 115 USD/barrel. If the situation continues like this, there is a chance the fund will go into negative hundred billion.”
However, despite the high oil price situation in the world market Diesel price (Gas Oil) $141.15/barrel but the fuel fund is still in a position to manage liquidity. To help mitigate the impact during this time for the people to go first. Mr. Kulit also said that Progress of the 20,000 million baht loan of that fund Currently, it is still in the process of discussing financial institutions. and the Ministry of Finance how to proceed Under what conditions? It is also confident that there will be money to add liquidity to the fund within June as planned which because the situation is still in a crisis But in the past, the fund has been negative. But I must admit that this crisis is more difficult and challenging. In addition, the fund must be burdened with expenditure on LPG subsidies previously.
“Diesel tax reduction by 5 baht/liter, but there is no diesel retail price reduction because it is used to enhance the liquidity of the fund to help fix the diesel price not to exceed 32 baht / liter for as long as possible The tax reduction of 5 baht / liter is the part of B0 diesel meat that was originally charged excise tax at 6.44 baht / liter and when it was reduced by 5 baht, the tax would be charged at 1.44 baht / liter. But at present, Thailand uses diesel blended at 7% or B7, which charges a tax of 5.99 baht per liter and when the tax on diesel is mixed, resulting in a reduction of the tax price to 4.65 baht per liter, which will make The remaining excise tax on B7 oil is 1.34 baht per liter.”
Therefore, the reduction of diesel excise tax by 5 baht / liter reduces the burden of subsidies of the fund by 2.46 baht / liter, in addition to reducing the burden of 79 satang / liter to 7.25 baht / liter, from now subsidizing diesel at 9.41 baht / liter from Last week, subsidized at 10.89 baht/liter, while the need to adjust diesel prices up to 33 baht/liter, only when the fund is negative to 80 billion baht or the assumption of world oil prices fluctuates even higher.
“Even though the conflict between Russia and Ukraine will end, will it cause oil prices to fall? I can’t answer because I think the oil price crisis has not disappeared immediately must closely monitor and analyze the situation of world oil prices until the end of this year The valuation of Dubai crude oil does not exceed 120 USD/barrel. The world market diesel price does not exceed 140-145 USD/barrel,” Mr Kulit said.