11 July 2024

Two state-run banks, Krung Thai and Government Savings, have offered to extend loans, amounting to 5 billion baht, to the debt-ridden Oil Fuel Fund, to ease its current liquidity problems.

An informed government source said that loan, which will be guaranteed by the Finance Ministry, is the first tranche of about 30 billion baht in loans to be secured by the Fund, which is running an estimated 129 billion baht in the red as a result of the government’s policy to subsidise the prices of fuel and LPG cooking gas, in the wake of global oil price increases.

With approval from the cabinet, the Finance Ministry has invited seven financial institutions, both private and state-run, to offer loans to the Fund at their respective interest rates. The ministry will choose the banks that offer the lowest rates. Krung Thai and Government Savings banks made the offers for the first tranche of 5 billion baht yesterday (Thursday).

The source said that the Finance Ministry will issue the second invitation next week, for another 5 billion baht, adding that, for the remaining 20 billion baht, the Finance Ministry will decide when and how much to borrow.

By the end of October, the Fund had recorded a loss of about 129 billion baht, divided into about 86 billion baht for oil subsidies and about 42.9 billion baht for LPG subsidies.

The Fund did, however, receive a one billion baht contribution for November from PTT Public Company.