Energy Minister Eyes Reserve Funds to Fix Oil Fund Deficit

Energy Minister Ekkanat Promphan revealed at the annual Energy Symposium 2026, organized by the Federation of Thai Industries under the theme 'Thailand Pragmatic Energy Transition: New Era Energy Elevates Thai Industry to Sustainable Global Competitiveness,' that the Ministry of Energy is exploring solutions for the Oil Fuel Fund's negative balance of 103,561 million baht. The goal is to improve liquidity and reduce financial burdens without additional borrowing.

One approach under consideration involves tapping unused accumulated funds from other sources, particularly the Energy Conservation Fund, to bolster the Oil Fuel Fund. The ministry has also asked the Ministry of Finance to consider using dividends from oil companies in which it holds shares to ease the public's burden during periods of high energy prices. However, both options are still under study, requiring analysis of each fund's objectives and constraints, as well as operational details. No conclusion has been reached on how much money could be used or when.

'Even though the fund is more than 100 billion baht in the red, it is still lower than during the Russia-Ukraine war when it reached a negative 150 billion baht, so management options remain,' Ekkanat said. He added that excise tax reduction is a last resort because past experience shows cutting taxes by 3-5 baht per liter for extended periods caused state revenue losses and increased the need for borrowing.

For recent fuel price management, the government has used the Oil Fuel Fund mechanism alongside refinery margin differentials, deploying nearly 30 billion baht from the latter to cut fuel prices by 4 baht per liter, mitigating the impact of rising global oil prices over the past two months.

Meanwhile, the Energy Ministry has discussed with the Finance Ministry targeted excise tax cuts for biofuels E20 and B20. B20 targets the transport sector, while E20 helps reduce costs for motorcyclists, riders, and agricultural equipment users. Both fuels are currently priced about 6 baht per liter lower than E10 and B7, and the government aims to maintain this differential. Daily B20 consumption has risen to around 6 million liters from previously minimal levels, reflecting biofuels' role in lowering transport costs. Ekkanat confirmed that refinery margin collection will continue until fuel prices improve.

Regarding the 2026 Power Development Plan (PDP 2026), Ekkanat said it is under review after public consultations. Four preliminary options have been proposed, all targeting an increase in clean energy share from the current roughly 20% to 50% within the first 10 years, with overall clean energy targets ranging from 65% to nearly 90%. No final decision has been made; the ministry will evaluate and refine all four options, particularly comparing costs and benefits of expanding clean energy capacity versus carbon capture and storage (CCS) technology to balance clean energy, grid reliability, and electricity prices.