Senate approves Treasury Department guarantee of Oil Fuel Fund debt

Thailand’s Senate today (Monday) gave the finance ministry the go-ahead to guarantee the 130 billion baht debt incurred by the Office of Oil Fuel Fund, following the government’s gas price subsidy policy cooking during the COVID-19 pandemic.

Before the pandemic, the Office of Oil Fuel Fund had a reserve of 36 billion baht, which was used for the subsidy. However, the pandemic lasted about three years, while world prices for imported gas and cooking oil rose steadily, resulting in a huge loss for the Fund as its reserve fund was depleted and had to borrow more. .

Senators debated this issue today before agreeing, by a majority, to approve the Finance Ministry’s plan to guarantee the Fund’s debt.

Senator Sathit Limpongpan said the Fund must maintain strict financial discipline and exercise caution in spending borrowed funds to subsidize cooking gas. He also suggested that the Fund have a clear debt repayment plan.

Another senator said he agreed that cooking gas subsidies are needed, otherwise the domestic price could reach around 45 baht/litre, fueling inflation.

A total of 187 senators voted in favor of the finance ministry’s guarantee plan. One voted against and there were five abstentions.