What drivers pay at the pump now reflects a fund in crisis
Thailand's Oil Stabilisation Fund has pushed its negative balance past 100 billion baht, forcing the committee that manages it to let pump prices climb. On 9 October 2026, the Fuel Oil Fund Management Committee raised retail prices for all fuels by 0.75 baht per litre — except for B20 diesel, gasohol E20 and E85, which held steady. The decision marks the third significant hike in six weeks.
How the fund works, and why it is bleeding
The Oil Stabilisation Fund exists to smooth out global price swings for Thai consumers. When world oil prices fall, the fund collects contributions. When prices rise, it pays out subsidies to keep retail prices lower than the market would otherwise dictate. The fund is managed by the Fuel Oil Fund Management Committee, known by its Thai abbreviation Khon Por Nor (กบน.), which reports to the Ministry of Energy.
This year, the outflow has overwhelmed the inflow. As of 4 October, the fund's negative position stood at 98.9 billion baht, split between an oil account deficit of 58.4 billion and an LPG cooking gas account deficit of 40.5 billion. By 8 October, it crossed the 100 billion threshold. The daily subsidy burden has fallen from a peak of 1–2 billion baht to about 316 million baht per day as of 7 October — roughly 289 million for fuel and 27 million for LPG.
The price hikes so far
The committee has responded by moving pump prices closer to market rates:
• 2 September 2026: Diesel up 0.75 baht/litre; petrol up 0.60 baht/litre
• 15 September 2026: All fuels up 0.85 baht/litre
• 2 October 2026: All fuels up 0.75 baht/litre
• 9 October 2026: All fuels up 0.75 baht/litre, except B20, E20 and E85
A litre of diesel currently receives roughly 2 baht in subsidy, down from higher levels earlier in the year when the fund was paying out as much as 700 million baht daily on diesel alone.
The Ministry of Energy's next moves
Thailand's Ministry of Energy says it will not borrow more money to refill the fund, despite the record deficit. On 7 October, ministry officials confirmed that borrowing remains a last resort because loans would add interest costs that ultimately fall on consumers. The fund still has about 10 billion baht in revolving cash, enough to manage operations and service existing debt of roughly 1.3 billion baht per month.
Instead, the ministry is pursuing an "exit strategy" — a gradual reduction of subsidies. The Cabinet has approved a new strategic plan for 2026–2029 that separates oil and LPG accounts, defines what constitutes a fuel crisis, and sets clearer rules for price stabilisation. Other tools on the table include capturing excess refining margins and adjusting excise taxes on biofuels like B20 and E20.
Why global prices remain stubborn
Brent crude averaged 26.7% higher in the first nine months of 2026 than in the same period of 2025, driven by geopolitical conflict in the Middle East. The Ministry of Commerce's Office of Trade Policy and Strategy expects elevated energy prices to persist through year-end.
Thailand imports most of its oil, and its retail prices are benchmarked against Singapore refining margins — a mechanism that critics argue does not always reflect actual local costs.
What economists say
Analysts argue the fund cannot sustain broad subsidies indefinitely. Dr Nongnuch Tantisantiwong, an independent economist, has warned that the government must signal a clear path toward market-based pricing or risk a "crisis of confidence." Dr Nopphon Karnika, a policy and risk scholar, observed that the fund's balance dropped 11.8 billion baht in a single week in March — an unusually rapid deterioration. Amornthep Chawala of CIMB Thai Bank recommended that the state shift to targeted aid for low-income groups rather than attempt to hold down prices for everyone.
How neighbours handle the same problem
Thailand's approach differs markedly from its neighbours:
• Malaysia uses an Automatic Pricing Mechanism that adjusts weekly, but maintains subsidies for RON95 petrol and diesel through a targeted programme. Since July 2026, eligible Malaysians buy subsidised diesel at 2.10 ringgit (about 16 baht) per litre using MyKad identity cards — a shift from subsidising fuel to subsidising people directly.
• Singapore lets market prices rule at the pump. The government provides household utility rebates like U-Save to ease cost-of-living pressures instead of fuel subsidies, since the city-state imports all its energy needs.
What this means for Thai drivers
Each price increase adds roughly 30–40 baht to the cost of filling a typical 50-litre tank. That is roughly equivalent to a bowl of kuay teow noodles at a street stall with each fill-up. Motorists who switch to B20, E20 or E85 can still buy at the previous, lower prices, but ample biofuel pumps are not available at every station. The fund's direction suggests that further gradual increases are likely as long as global oil prices stay high.
