BANGKOK, July 17 Thailand's military government
is finalising details of energy reform, which include plans to
improve the position of the State Oil Fund and restructure
domestic fuel prices from a highly regulated system to a
Domestic energy prices in Thailand have been distorted by
various populist policies under previous governments through the
Previous attempts to restructure energy prices failed
because of strong public opposition and the need for politicians
to maintain their voting bases.
Since it seized power in May, the military has discussed
with several energy-related officials how to reform the sector
and all parties have agreed that fuel prices should be
restructured in the interest of fairness, a military official
The reform plan has been submitted to the junta leader,
General Prayuth Chan-ocha, for consideration, which is expected
take up to two weeks, Air Chief Marshal Prajin Juntong, deputy
head of the military council, told reporters.
"This is aimed at reducing the financial burden of the State
Oil Fund," Prajin said after meeting with the Energy Planning
and Policy Committee on late Wednesday.
To boost cash flow to the Oil Fund, the committee also
agreed to collect 1 baht per litre on sale of diesel, which will
raise the fund's daily cash inflow to 33 million baht, from a
current outflow of 27 million baht, Prajin said.
The collection will be done via a cut in the oil retailers'
marketing margin for diesel by 1 baht, to 1.50 baht a litre, he
The fund, which is not part of the national budget and is
overseen by the energy policy committee, now posts a negative
balance of 8.8 billion baht ($273.63 million) due to subsidies
on various types of fuels like liquefied petroleum gas (LPG).
Major cash inflows to the fund come from gasoline and
gasohol users, while LPG users contribute different amounts.
Proceeds from the fund are also used to subsidize users of
State-controlled PTT Pcl, the country's sole gas
supplier, has to import LPG at the global price and sell it at a
fixed price of $333 a tonne, while the Oil Fund has to levy tax
on gasoline users to compensate PTT.
Prices of LPG for cooking have been raised to 22.63 baht per
kg to reduce the huge subsidy burden carried by the Oil Fund,
but the junta decided to scrap a plan to float the LPG prices
until the new energy reform policy is completed.
($1 = 32.1600 baht)
(Reporting by Khettiya Jittapong; Editing by Robert Birsel)