The National Energy Policy Committee (NEPC) on Wednesday resolved to remove the 40-billion-baht cap on loans to support the Oil Fund in the wake of the Russian invasion of Ukraine.
Kulit Sombatsiri, permanent secretary for energy, said the decision will give the government more room to deal with soaring oil prices.
The decision reached in the NEPC meeting chaired by Prime Minister Prayut Chan-o-cha will be submitted for cabinet approval next week.
The government uses the Oil Fund to help manage energy prices, both oil and gas. The loan ceiling has been set at 40 billion baht to ease public burden.
The decision came as the government is feeling the heat from rising oil prices in the global market. The situation has taken its toll on energy consumption in the country.
On Wednesday, retail gasohol prices almost exceeded 40 baht a litre, while retail diesel prices remained at 29.99 baht a litre. The fund is used to cap diesel prices at below 30 baht a litre to offset soaring transport costs.
The fund currently had losses of 24 billion baht, according to the data of the Oil Fuel Fund Office on Sunday.
Although a loan ceiling may not be enforced, Mr Kulit said the government would try to keep it under the 40-billion-baht limit, depending on the energy situation.
The NEPC had explored different oil scenarios and measures to handle the situation based on the range of global prices from US$100 to the worst case of $150.
Details of the issue will be made public by Deputy Prime Minister and Energy Minister Supattanapong Punmeechaow on Friday.
Gen Prayut said after the meeting that the government would try keep diesel prices under 30 baht as long as it could. But the capped price would be reconsidered if oil prices showed no sign to decrease, Mr Kulit added.
Global oil prices on Monday soared to their highest since July 2008, with Brent at $139.13 and WTI at $130.50 after the United States and European allies mulled an import ban from Russia.
The prices of WTI and Brent were down to $119.58 and $124.16, respectively, as of 7.30pm on Wednesday.
