The National Energy Policy Committee yesterday approved extending the cap on the price of diesel fuel for two more months.
The Oil Fund will continue subsidies to keep the retail price of diesel below Bt30 per litre until April, Prime Minister Abhisit Vejjajiva said after a meeting of the NEPC.
"The NEPC approved main?taining the price with support from the Oil Fund until April, because of continuing volatility in the global oil price," he said.
He noted that if the Oil Fund's reserves fell to Bt10 bil?lion because of the subsidy, the committee would reconsider the April date for ending the measure. The reserves now stand at Bt23 billion.
The NEPC also endorsed a cut in compulsory biodiesel content, from 3 per cent to 2 per cent. This will reduce the demand for palm oil, the major raw material for biodiesel. The lower content will stay until the end of March, on expectation that more palm oil will hit the market in April.
The lower biodiesel content will save the Oil Fund Bt600 million per month.
Palmoil shortages are prompting the government to resort to imports. The higher the biodiesel content, the higher the price of the fuel at the pump could rise, as shortages are driving up the price of palm oil.
The Energy Ministry earlier planned to increase the compulsory biodiesel content to 3 per cent in January, but the plan was postponed.
