Thailand oil fund deficit nears 100bn baht

Thailand's Oil Fuel Fund deficit stands at about 92 billion baht and could reach 100 billion baht by late September or early October, according to an Energy Ministry source.

The shortfall is increasing by roughly 700 million baht a day as the fund continues subsidising diesel and petrol to support price caps. Recent declines in oil prices have not been sufficient to improve its finances, stated in a report published on 22 September.

Loans already used to repay debt

The fund has separately borrowed 20 billion baht in its own name, outside a government-established borrowing facility under legislation. Two domestic commercial banks provided the money in two rounds of 10 billion baht, and all of it was used to repay existing debt.

The Energy Ministry source said a further 10 billion baht borrowed last week had also been spent.

"The 20 billion baht has all been used to repay debt. Another 10 billion baht borrowed last week has also been spent. To determine how large the borrowing facility needs to be, we first have to look at how much debt it must cover, which could take it to 100 billion baht. Drawing down the money is a separate matter, and it would probably be drawn in stages as before," the source said.

A fresh borrowing facility of around 100 billion baht is now being considered to cover the fund's obligations and maintain support for diesel and petrol prices. The final requirement will be reviewed after discussions with the new permanent secretary for energy and the energy minister.

Any new loans would come from domestic commercial banks, with terms depending on interest rates and conditions at the time. A Finance Ministry guarantee could be required, as in the previous borrowing round. About 10 billion baht in principal remains outstanding, while the fund must continue meeting interest payments to avoid its debt becoming non-performing.

Subsidy cuts remain an alternative

The Cabinet has approved an extension of the energy crisis response plan until 2029, replacing its previous 2024 end date. It keeps a 30-baht-per-litre benchmark for diesel and petrol price-support measures.

The plan also raises the one-week oil-price movement threshold from US$5 to US$10 a barrel, reflecting greater market volatility.

Reducing or ending fuel subsidies remains an alternative to additional borrowing. The source said this would require an assessment of how much retail prices would rise and whether the government should introduce targeted assistance or other relief for consumers.

The ministry is also considering a bigger role for biofuels to reduce import dependence, although biodiesel and ethanol pricing needs further discussion because domestic feedstock costs remain high. The source also cited the continuing Middle East conflict as a risk that could keep international fuel prices elevated despite recent short-term falls.

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24 September 2026