Thailand hikes diesel to 33 baht to ease fund strain

2026-03-24 - 07:40

BANGKOK — 23 March 2026, Thailand will raise the retail price of diesel to 33 baht per litre from 24 March 2026, as authorities move to ease mounting pressure on the state Oil Fuel Fund following a sharp spike in global energy prices. Pornchai Jirakulpisan, director of policy and planning at the Oil Fuel Fund Office, said that the Oil Fuel Fund Management Committee approved a reduction in diesel price subsidies, effectively lifting the pump price to the new level. The decision comes amid escalating tensions in the Middle East, particularly following attacks involving Iran, which have driven diesel prices in the Singapore market sharply higher — from about 92 U.S. dollars per barrel to 223 dollars, an increase of 131 dollars. The surge translates into an estimated rise in costs of around 26 baht per litre. As a result, the Oil Fuel Fund has been shouldering compensation costs of nearly 2.4 billion baht per day, or roughly 70 billion baht per month, prompting urgent measures to preserve the fund’s liquidity and maintain long-term price stability. Officials said the price adjustment also aims to narrow the gap with neighbouring countries to deter fuel smuggling and stockpiling. Malaysia, for instance, has already raised its diesel price to around 38.70 baht per litre as of 16 March. Authorities warned that keeping domestic prices significantly lower than regional levels could incentivise illegal exports and profiteering, leading to resource leakage. The Energy Ministry said the move was necessary to balance the fund’s financial stability with national energy security, adding that it would continue to work with relevant agencies to mitigate the impact on the public.