Oil Fund Tightens Controls With Separate Accounts and Crisis Reserves
Thailand's Oil Fuel Fund has tightened controls by raising price volatility thresholds, separating petroleum and LPG accounts to prevent cross-subsidies, and building reserves during stable market periods to manage fuel crises through 2029.
The Oil Fuel Fund has adjusted its volatility threshold from $5 to $10 per barrel and will maintain separate accounts for petroleum and LPG while prohibiting cross-subsidies between product groups, while establishing a system for accumulating reserves during stable market periods.
Pornchai Jirakoolpaisarn, director of policy and planning at the Oil Fuel Fund Office, announced that the cabinet has approved a fuel crisis management plan and strategic framework for 2026-2029 to stabilize domestic fuel prices as the fund faces mounting liquidity pressures.
The new plan clarifies criteria for deploying fund resources in three crisis scenarios: soaring fuel prices harming the public, severe price volatility, and fuel shortages affecting the economy. For price increases, the fund will intervene when diesel and petrol exceed 30 baht per litre, while LPG will be considered when refinery costs exceed import prices or retail prices exceed 423 baht per 15-kilogram cylinder, up from 363 baht.
For volatility cases, the threshold has been raised from $5 to $10 per barrel per week for crude oil price swings, and from 1 baht to 2 baht per litre per week for retail fuel prices. For LPG, intervention occurs when global market prices change more than $35 per tonne monthly or retail prices shift more than 1 baht per kilogram monthly.
The plan mandates clear separation of accounts between petroleum and LPG operations to prevent cross-subsidization, with an emphasis on compensating diesel and LPG prices during prolonged crises. The fund will now accumulate reserves during periods of falling global oil prices to build a liquidity buffer for crisis periods, shifting from reactive problem-solving to proactive reserve management.
The strategy also emphasizes biofuels, which can be produced domestically from agricultural products, to reduce reliance on imported crude oil and shield the economy from global energy price shocks while enhancing long-term energy and economic stability.
