Thailand to borrow 20 billion baht to maintain fuel subsidies

Photo by Dawn McDonald via Unsplash

The Office of Fuel Fund plans to borrow 20 billion baht to top up the country’s oil price subsidies as residents and different departments are being increasingly affected by the rising oil price. The fund is seeking inbound loans from the Government Saving Bank and Krungthai Bank. The details are expected to be clear at the end of this month.

The Director-General of the Fuel Fund Office, Wisak Wattanasup, said the fund was negotiating with the Government Saving Bank and Krungthai Bank to obtain the first batch of loans valued at 20 billion baht. Wisak noted that the fund had a backup plan if those 2 financial institutions were unable to furnish the loans. But the director was confident that the fund would be able to sort out the loan before the end of this month.

The Head of the Policy and Strategy Department, the Fuel Fund Office, Ponchai Jirakunpisarn, insists that the fund borrowed money only as needed and considered the loan amount according to the ability to practically service the loan.

Ponchai explained that the Fuel Fund had a remaining budget of about 13 billion baht, so the fund didn’t plan to use all 20 billion baht immediately after getting it. The funds are being borrowed “just in case the fund was running out of budget”.

The Thai government has been subsidising the retail price of diesel by up to 10 baht a litre, artificially capping the diesel prices in Thailand. Ponchai added that the reduction of the excise tax for diesel at 5 baht per litre announced by the government is also reducing the fund’s subsidy burden and budget.

SOURCE: Khaosod | Dailynews

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Petch Petpailin

Petpailin, or Petch, is a Thai translator and writer for The Thaiger focusing on Thai news and what's happening in Thailand. She is a news writer who stops reading news on the weekends to spend more time cafe hopping and petting dwarf shrimp.