Thailand manages rising diesel prices amid fuel subsidy pressures

Diesel prices in Thailand have surpassed the 40-baht per litre threshold, with premium grades exceeding 49 baht. This surge is driven by global energy market volatility and geopolitical tensions in the Middle East, significantly impacting the transport, logistics, and agricultural sectors.

To mitigate the impact on the cost of living, the Thai government has implemented several measures throughout 2026. These include reducing refinery prices for diesel blends (B0, B7, and B20) by 4 baht per litre from September 16 to October 31. The government has also utilized the Oil Fuel Fund to subsidize costs, though the fund's deficit is reportedly approaching 80 billion baht, with daily expenditures exceeding 700 million baht to maintain retail stability.

Finance Minister Ekniti Nitithanprapas indicated that the government is considering targeted excise tax cuts on E20 and B20 fuels. Such a move would aim to support both consumers and the agricultural sector, as these fuels rely on sugarcane, cassava, and palm oil. However, officials noted that any tax reductions must be balanced against the potential impact on government revenue and the country's fiscal position.