March 4 (Bloomberg) -- Thailand’s government increased its diesel subsidy to oil companies by 0.5 baht (2 cents) per liter, which will deplete the state oil fund soon, Energy Minister Wannarat Charnnukul said.
The government will need to seek other measures, including raising pump prices or decreasing excise taxes, Wannarat told reporters in Bangkok today.
“I don’t want the fund to go negative again like in the past,” he said.
Prime Minister Abhisit Vejjajiva’s government has kept the diesel price under 30 baht since December. After deducting subsidies for retail prices of liquefied petroleum gas and natural gas for vehicles, the fund has about 7 billion baht ($229.7 million), he said. Earlier, he had said the fund would reach 7 billion baht by the end of the month.
The government previously aimed to keep the fund balance above 10 billion baht.
Today’s increase means the government is now subsidizing diesel by 5 baht per liter to keep the retail price from rising above 30 baht per liter, he said. Abhisit reiterated yesterday that he wants to keep the diesel subsidy until April to ease the public burden.
To contact the reporters on this story: Suttinee Yuvejwattana in Bangkok at Suttinee1@bloomberg.net
To contact the editor responsible for this story: Daniel Ten Kate at email@example.com