The government has decided not to extend the B1 reduction in the excise tax, meaning the new pump price for diesel would be B31.44 a litre, up from B30.44 baht.
However, a subsidy of 50 satang has been approved to reduce the price to B30.94, reports Bangkok Post.
The Energy Policy Administration Committee (Epac) reached the decision on Friday (Apr 19) after the Oil Fuel Fund Office (Offo) said it would be willing to pay a partial subsidy if the excise tax break ended.
Diesel prices will probably have to rise further, given that the Oil Fuel Fund is already heavily in debt, said Veerapat Kiatfuengfoo, director-general of the Energy Policy and Planning Office and secretary to Epac. But increases would be gradual, he added.
The fund had an accumulated loss of B103.6 billion as of April 8, having spent B56.4bn to subsidise diesel, gasohol and gasoline prices and B47.2bn to subsidise liquefied natural gas prices.
Policy makers are trying to prevent the impact of oil price fluctuations, caused by geopolitical conflicts, especially in the Middle East, which is expected to drive up global crude oil prices, said Wisak Watanasap, the Offo director.
The current subsidy for diesel prices is B4.17 a litre. The excise tax will return to its normal rate of B6 a litre today (Apr 20).