Thailand Cuts Diesel Subsidies as New Fuel Rates Take Effect

BANGKOK – Thailand has officially entered a new phase of energy management. As of Wednesday, April 15, the Oil Fuel Fund Management Committee has implemented significant changes to the country’s fuel subsidy structure.

This move, detailed in Announcement No. 46 B.E. 2567, marks a strategic pivot in how the government balances the national budget against the rising cost of living.

If you have been keeping an eye on the numbers at the pump, you aren’t alone. The latest adjustments see a reduction in the financial support provided for diesel, while the government continues to collect contributions from petrol and gasohol users to keep the fund stable.

Breaking Down Thailand’s New Diesel Rates

For years, the Oil Fuel Fund has acted as a buffer, protecting Thai consumers from the full impact of global oil price spikes. However, maintaining this shield is expensive. The new rates show a clear intent to scale back compensation while still providing a safety net for essential transport fuels.

Diesel B7: Compensation has been cut to 5.89 baht per litre, down from the previous 7.85 baht.
Diesel B20: Support has dropped to 11.67 baht per litre, compared to the earlier rate of 13.19 baht.
Premium Diesel: Users of high-end diesel will now contribute 1.50 baht per litre to the fund, rather than receiving support.

These changes reflect a difficult balancing act. The government wants to keep retail prices manageable, yet it must ensure the Oil Fuel Fund remains solvent in the long term.

While diesel receives support, petrol and gasohol products remain the primary contributors to the fund. This “cross-subsidization” is a long-standing policy where users of certain fuels help pay for the subsidies of others.

Here is how the contributions look under the new measure:

Petrol: A contribution of 9.66 baht per litre.
Gasohol 95 and 91: Both contribute 2.84 baht per litre.
Gasohol E85: A contribution of 2.31 baht per litre.
Gasohol E20: This remains one of the few gasohol products to receive compensation, currently set at 2.26 baht per litre.

Other fuels like kerosene and fuel oil are also seeing minor contribution requirements, set at 0.10 baht and 0.06 baht per litre, respectively.

Why Is This Happening Now?

The decision to adjust these rates isn’t random. It follows the guidelines set by the National Energy Policy Council. Three main goals are driving this policy:

Market Accuracy: The government wants domestic prices to more closely reflect the actual cost of oil on the global market.
National Security: By reducing the debt of the Oil Fuel Fund, Thailand is better prepared for future energy shocks, such as those caused by Middle East tensions.
Cost of Living: Despite the cuts in subsidies, the committee is attempting to keep the retail price of fuel at an “appropriate level” to prevent a sudden spike in the price of goods and services.

For many Thais, the most important number is the one they see at the gas station. As of the implementation date, prices have stabilized at relatively high levels. Petrol stands at 52.54 baht per litre, while regular diesel is priced at 44.40 baht.

For those using premium products, the cost is even higher. Premium diesel brands like OR’s Super Power or Bangchak’s Hi Premium are currently retailing for over 66 baht per litre. These prices highlight why the government is hesitant to remove subsidies entirely—doing so could push many transport businesses and commuters to a breaking point.

The energy landscape is changing. With the government backing new energy security initiatives with partners like Japan, there is a clear push toward long-term stability. However, the immediate future involves a “new normal” of higher prices and less government intervention.

Experts suggest that consumers should prepare for continued volatility. As global markets fluctuate due to geopolitical conflicts and supply chain issues, the Oil Fuel Fund will likely continue to adjust its rates. For now, the goal remains clear: protect the economy without bankrupting the fund that keeps Thailand moving.