ENERGY

Oil fund to start backing mass transit

Yuthana Praiwan

The state-managed oil fund will continue collecting levies on motor fuel sales even though its outstanding debt will be wiped out by next March.

But instead of using the money to subsidise fuel prices, the fund will invest in mass transit and alternative energy, said Siwanan Na Nakorn, director of the Energy Fund Administration Institute, the body set up to run the oil fund.

The fund began subsidising fuel prices on Jan 10, 2004. Gasoline was subsidised until Oct 20, 2004 while diesel was subsidised until July 13, 2005, during which time the fund accumulated a huge debt of 92 billion baht.

The fund currently earns 12 billion baht a month but pays out seven billion to subsidise cooking gas and 4.9 billion for debt repayment, giving it a net surplus of 50 million baht per month.

Mr Siwanan said that once the oil fund was debt-free next March, it was projected to have a surplus of 50 billion baht by October 2008 from income of 10 billion baht a month.

The government could use the surplus to support mass transit and to promote alternative energy and energy conservation, he said. No new oil fund will be established when the existing debt has been cleared since energy prices in Thailand are already cheaper than in neighbouring countries, he added.

Bangkok Post

Friday April 06, 2007