Cabinet approves new measures to tackle fuel price volatility

The Cabinet has approved new fuel crisis contingency and strategic plans for the Oil Fuel Fund for 2026–2029, aimed at strengthening the government’s ability to respond to volatile global energy prices and maintain domestic fuel price stability.

Pornchai Chirakulpaisan, director of the Policy and Planning Bureau of the Oil Fuel Fund Office (OFFO), said on Tuesday that the plan, which was proposed by his office, revises the criteria and conditions for using the Oil Fuel Fund to subsidise or compensate fuel prices.

It identifies three situations in which the measures can be introduced.

The first is when energy prices rise significantly and affect the public. Diesel and petrol prices must exceed 30 baht per litre, while LPG measures may be considered when production costs at gas separation plants operated by PTT Exploration and Production and UAC exceed import prices, or when the retail price exceeds 423 baht per 15kg cylinder, up from the previous threshold of 363 baht.

The second is a sharp fluctuation in fuel prices.

Measures can be introduced if refined oil prices rise or fall by more than US$10 per barrel within a week, compared with the previous threshold of US$5, or if retail fuel prices change by more than 2 baht per litre within a week, up from 1 baht.

For LPG, measures can be considered if global prices rise or fall by more than US$35 per tonne within a month, or if retail prices change by more than 1 baht per kilogramme within a month.

The period has been extended from two weeks to one month to align with the monthly LPG CP pricing mechanism.

The third situation is a fuel shortage or insufficient supply that affects the economy, quality of life or public welfare. The measures under the plan can then be used to maintain energy security.

The new plan also gives greater consideration to fuels blended with biofuels produced from domestic agricultural products. The move is intended to reduce Thailand’s dependence on crude oil from volatile global markets, while supporting domestic agricultural production.

The government will also be able to manage domestic retail fuel prices at appropriate levels to help maintain economic stability and strengthen long-term energy security.

Under the new Oil Fuel Fund strategy, the fund’s financial accounts will be separated into oil and LPG accounts, to reduce cross-subsidisation between the two groups.

Fuel price management will focus primarily on subsidising diesel and LPG prices during prolonged crises. At the same time, the fund will accumulate money when global oil prices fall, to build liquidity for future emergencies.

The strategy also promotes greater use of fuels blended with biofuels made from domestic agricultural products, with the aim of reducing dependence on imported crude oil and strengthening Thailand’s long-term energy security.