According to government spokeswoman Rachada Dhnadirek, the borrowing can proceed once the Cabinet approves the public debt management plan, reports the Bangkok Post.
Ms Rachada said the US-Israel war on Iran since late February has reduced global fuel supplies and driven up oil prices, affecting retail prices in Thailand and increasing the cost of living.
As of Apr 5, the Oil Fuel Fund reported a deficit of B53bn, including outstanding compensation debts owed to fuel traders totalling around B56bn. This deficit has led to liquidity shortages among operators, affecting their ability to procure fuel and raising the risk of domestic shortages.
At the Oil Fuel Fund Management Committee meeting on Apr 10, officials agreed to propose that the Cabinet approve the borrowing plan to maintain stable domestic fuel prices at appropriate levels during the crisis.
The plan calls for the B20bn loan to be used between June and August 2026, with repayment scheduled from July 2028 to August 2031.
Ms Rachada said the loan approval is intended to enhance the fund’s liquidity, help mitigate the energy price crisis, maintain fuel prices at reasonable levels and align them with global market conditions.