Tuesday, December 18, 2007

Oil Fund's B89bn debt to be fully paid off by next week

Business News - Tuesday December 18, 2007


Oil Fund's B89bn debt to be fully paid off by next week


The state Oil Fund is expected to be free of debt by next week, according to Energy Minister Piyasvasti Amranand.

The ministry has been working since July 2005 to clear the fund's debt of 89 billion baht, most of it racked up by the Thaksin Shinawatra government when it moved to cap retail fuel prices in 2004-05.

Steady increases in fuel levies collected by the fund have brought its debt down to 401 million baht as of yesterday.

The levies per litre are currently four baht for premium gasoline, 3.30 baht for regular gasoline, 0.30 baht for gasohol 95, 0.70 baht for high-speed diesel, and 0.295 baht for cooking gas.

However, to promote alternative fuels, the fund is subsidising gasohol 91 by 0.20 baht a litre, B5 diesel by 0.10 baht and E20 gasoline by 0.05 baht.

B5 diesel is a mixture of 5% biofuel and high-speed diesel, while most gasohol sold is E10 or 10% ethanol.

Once the Oil Fund is debt-free, fuel levies will continue and the funds raised will be used for Bangkok mass transit and a nationwide dual-track rail project.

Dr Piyasvasti said the levies would be set at appropriate rates but exact amounts were not yet decided.

However, the government will have to transfer the proceeds from the Oil Fund to the energy conservation fund, in line with the original goal of Oil Fund, which was to finance programmes that promote energy conservation.

Dr Piyasvasti said that oil consumption had fallen since the Thaksin government abandoned fuel subsidies in 2005 and allowed prices to reflect real market rates. he said consumption fell 2.3% in 2005, 1.8% in 2006 and 0.6% for the first 10 months of 2007.Oil imports have declined from an average of 757,000 barrels per day in 2004 to 711,074 in 2005, 672,573 in 2006, and to 654,289 barrels per day in October this year.

Oil imports from January to October this year were worth 568 billion baht, compared with 596 billion baht for all of 2006, reflecting higher world oil prices this year.

Bangkok Post

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