The board of the Oil Fuel Fund Office agreed on Tuesday to increase the cap on the retail price of standard diesel by one baht to 34 baht per litre from Tuesday.
Director Wisak Watanasap said after the meeting that the increase will be applied to all retailers across the country. It will take effect at all pumps at 5am on Tuesday.
The decision was made due to global oil price hikes. Diesel prices on the Dubai market were up from US$149.49 per barrel on May 27 to $158.29 on Thursday.
The fund was 86 billion baht in the red as of May 29, an increase from the 72 billion baht reported on May 15, as the government used the fund to subsidise the diesel price.
Diesel is more expensive outside Bangkok and its vicinity, as is petrol.
Premium diesel is not subsidised and was 44.36 baht a litre at the pump in Bangkok on Monday.
The new price will remain for at least a week. The board will meet again next Monday to decide whether the price should be further adjusted.
The board earlier decided to set the ceiling price for standard diesel at 35 baht per litre, with the price to be increased gradually, by one baht per litre on a weekly basis, to reflect global oil prices.
Mr Wisak said that it was necessary to increase the pump price because global prices were rising due to the easing of lockdown measures in China and the reduction in US strategic oil reserves, as well as the ban on Russian oil imports by European nations.
The board also decided to help gasohol users by decreasing the levy collected on gasohol 91 and gasohol 95 by 0.93 baht per litre, making the new contribution only 0.09 baht, down from 1.02 baht. It will also add a subsidy to gasohol E20, to 0.94 baht per litre from 0.12 baht.
The decision was aimed at bringing down the retail price of the gasohol products in the market. Gasohol and gasoline share a quarter of Thailand’s fuel consumption and diesel slightly above half.
Mr Wisak said the fund was also on course to obtain 10 billion baht in loans from state-run Government Savings Bank and Krungthai Bank by the end of this month, to maintain its liquidity. The agency is seeking a total of 33 billion baht in loans from the two banks.