Bangkok: MPs from the People's Democratic Reform Committee (PDRC) have raised concerns over who truly benefits from the borrowing of funds from Thailand's Oil Fund, questioning whether the funds are intended to assist the public or to bolster the profits of energy tycoons.
According to Thai News Agency, Mr. Suphachot Chaiyasat, a party-list MP from the People's Party, highlighted the debt burden of the Fuel Fund. He noted that the Ministry of Finance has indicated that the Fuel Fund maintains liquidity and can borrow an additional 20 billion baht. However, if the current situation continues, further borrowing might be needed to maintain liquidity, and these funds would add to the country's public debt.
The ongoing turmoil in the Middle East has resulted in fluctuating global oil prices, prompting many countries to adopt energy security measures. In response, Thailand has temporarily frozen diesel prices at 29.94 baht per liter for 15 days, utilizing the Fuel Fund for subsidy purposes. However, the rapid increase in the diesel subsidy, which has nearly reached 17 baht per liter, has significantly strained the Oil Fund, which turned negative after initially being positive at the start of the month.
Mr. Suphachot expressed that the temporary relief provided by the oil price freeze might ease public living costs, but he questioned whether the billions of baht from the oil fund are truly aiding the public or supporting an energy price structure that benefits certain businesses. He pointed out that oil companies with refineries have tripled their refining margins from about 2 baht per liter to around 6 baht per liter, despite refining oil from previously acquired stock. He advised that the government should consider maintaining the original refining margin for oil from old stock.
Additionally, Mr. Suphachot questioned whether the government should permit energy companies to profit significantly during a national energy price crisis. He suggested that maintaining a refining cost of 2 baht per liter could potentially reduce the country's dependence on the oil fund by approximately 300 million baht daily.
He recommended that the government use its authority to require oil companies to provide transparent pricing structures, including refining and marketing costs, and investigate any potential overpricing in the sales process. Furthermore, if energy companies are found to be generating unusually high profits due to global oil prices, he suggested the government consider imposing a windfall tax on these businesses to generate revenue to reduce public living costs.