Only in a crisis

Thailand’s pump price is not what fuel costs. It is what fuel is being held at.

Article 72 Your bill is not broken made that argument about electricity — that ฿3.86 a unit was a number maintained by a subsidy with a finite pot, and that the pot was finite was the part nobody said aloud.

This is the same mechanism for fuel, and here the pot publishes its own balance.

What the fund is

The Oil Fuel Fund levies money on some fuels and pays it out on others, to stop the retail price moving as fast as the world price does. When crude is cheap it collects. When crude is expensive it pays. The intention is not a permanent subsidy but a shock absorber.

As at mid-September 2026 it was minus ฿80 billion. The fund office set out its position on 17 September.

It is paying out ฿770 million a day — roughly ฿23 billion a month — of which a little over ฿700 million is fuel and a little over ฿10 million is cooking gas. Its own office expects the deficit to reach ฿100 billion in October.

The cause is not in dispute. Diesel closed above US$195 a barrel, crude has held above US$100, and the fund’s office expects US$180–190 at year end. A pipeline in Saudi Arabia stopped after being attacked and shipping through the Strait of Hormuz has not improved. Thai pump prices rose ฿0.85 a litre on 15 September across petrol, gasohol and diesel.

The committee that runs the fund has been meeting every evening since the war began.

What it has already cost to hold the line

The clearest measure is the one the fund’s own office gives.

Diesel was once held at ฿30 a litre. On 24 September PTT’s pump price was ฿41.87. The fund did not prevent that increase; it slowed it, and the ฿80 billion is the price of the slowing.

Cooking gas is held at ฿423 for a 15-kilogram cylinder, a number the office describes as manageable.

And borrowing has already started. A Cabinet resolution of 28 April 2026 authorised the fund’s office to borrow ฿20 billion. Ten billion has been drawn. Ten billion remains, and any further facility needs a fresh political decision — because, as the office puts it, reducing the subsidy raises the cost of living, so the government would have to carry part of the burden itself.

The date in the Act

Now the part that makes this urgent rather than merely expensive.

The Oil Fuel Fund Act B.E. 2562 (2019) did not create an open-ended subsidy. Section 55 required the fund to stop compensating fuel blended with biofuel, within three years of the Act coming into force — by 24 September 2022.

It allowed that deadline to be extended not more than twice, each extension not more than two years.

The first extension ran to 24 September 2024. The second runs to 24 September 2026.

That is this Thursday, and section 55 does not contain a third.

What changes is the condition, not the fund. On the account of the fund office’s policy and planning director, after that date the fund cannot pay compensation in normal conditions as it has historically, and may act only where a crisis arises. Biofuel-blended fuel is fuel within the meaning of section 3 of the Act, so the fund may still support it — but as crisis relief rather than as routine price management.

Thailand sells almost no unblended fuel. Its diesel is biodiesel-blended and its petrol is gasohol. So a provision that reads as a technical carve-out about biofuel reaches very nearly every litre sold in the country.

And here is what that deadline actually does

A test that says “only in a crisis” constrains you only when there is no crisis.

Thailand is currently in one. Diesel has closed above US$195 a barrel, crude is above US$100, a pipeline has been attacked, the fund’s committee is meeting nightly and the pump price rose ฿0.85 a litre five days ago. Whatever the crisis threshold in this Act turns out to mean, these are the conditions it was drafted to describe.

So the provision designed to end a subsidy arrives at the one moment when it permits that subsidy to continue.

The fund’s office has said as much in public, in its own careful way. Asked what happens after the 24th, it said its work would carry on seamlessly and that consumers would not be affected — because the fund retains other instruments under the Act and the wider energy framework: the rates of the levy paid into the fund, tax adjustments, and policy measures taken with the rest of the energy ministry. The date, on this account, is not an ending but a planned change of mechanism.

Read that alongside the balance sheet and the shape becomes clear. The thing with a sunset clause written into it is the biofuel compensation. The thing that has cost ฿80 billion is holding diesel near ฿42 when the world price says otherwise — and that has no sunset clause at all.

This is not an accusation of bad faith. The 2019 drafters put a date on the subsidy they could see, and a crisis power underneath it for the circumstance they could not. That is ordinary, sensible drafting. The observation is narrower and it is arithmetic: a deadline that lapses whenever conditions are bad is not a constraint on spending in bad conditions, and the deficit was built entirely in bad conditions.

What happened on the day

The deadline passed on 24 September 2026. This is what the state did on and around it.

The Cabinet did not extend section 55 and did not need to. Instead it approved two four-year documents on the recommendation of the National Energy Policy Council, whose meeting of 18 September 2026 had endorsed them: a crisis plan for oil fuel covering 2026 to 2029, and a strategic plan for the fund over the same four years.

The crisis plan does the thing this article said was missing. It defines the crisis. And that matters more than it sounds: the Act itself defines an oil fuel crisis only in general terms — prices rising fast or swinging in ways that may affect people’s livelihoods, or a possible shortage — “as prescribed in the crisis plan” (section 3). Once the Cabinet approves the plan under section 14(1), its numbers are the working definition.

As reported from the fund office’s briefing — the plan document itself had not been published by 26 September — the first trigger is price: diesel or petrol above ฿30 a litre, or cooking gas above ฿423 for a 15-kilogram cylinder, or a gas-separation cost above the import price. The second is volatility: world refined-product prices moving more than US$10 a barrel within a week, or pump prices moving more than ฿2 a litre within a week, with equivalent monthly tests for cooking gas. The third is a shortage of fuel. Where a trigger is met, the fund may compensate; when world prices fall, it must collect money back in straight away.

Now set the first trigger beside the price on the forecourt.

On 24 September, the day section 55 ran out, PTT’s pump price for diesel was ฿41.87 a litre. The reported threshold is ฿30. The condition the plan defines as a crisis is not approaching — it has been exceeded by about two-fifths.

So the deadline written into the 2019 Act to end a subsidy in normal conditions arrived, and the state’s own definition of “not normal” was already satisfied on the day it arrived. That is this article’s argument, confirmed in the government’s own number rather than in this site’s reading of it.

And the legal question was settled separately. The fund’s office asked the Council of State, urgently, whether it could still manage the price of biofuel-blended fuel once the transitional period ended. The Council of State’s answer, as reported, is that blended fuel remains “fuel” within the Act’s own definition in section 3 — so the fund’s committee retains its full power under section 14(4) to set different levy and compensation rates by type and source of fuel.

Put those two things together and the picture is clear. The power to support biofuel did not end on the 24th; it was never only in section 55. What ended was a transitional permission. What replaced it was a policy rule — compensate only in a defined crisis — whose threshold the current price already clears.

The three-month biodiesel proposal this article originally described is therefore overtaken. The strategic plan names support for the biofuel transition as one of its five strategies. Article 184 Graded by the buyer found the value in an agricultural export settled downstream of the farm; here the argument for the subsidy is made on the grower’s behalf and collected at the pump — and it now has a four-year plan behind it.

None of this is a criticism of the plan. Publishing an explicit, numerical crisis definition is a genuine improvement on a subsidy that previously had no stated trigger at all. The observation is only that a threshold set below today’s price is, for as long as prices stay here, a threshold that permits rather than restrains — which is what this article said a deadline arriving in a crisis would be.

Which is a genuine argument, with two real sides

The energy agency says it will keep supporting biodiesel and ethanol and is working on how before the deadline. The case is not frivolous: blending reduces imported fuel, keeps money in the country, and supports farm income — article 33’s ageing farmers grow some of what goes into the tank.

The consumer side says the opposite and says it plainly. A prominent consumer advocate has argued that the time for the fund to carry biofuel is over and that the burden should stop being passed to the public — because the levy that funds the compensation is itself paid at the pump.

Both are describing the same transfer and disagreeing about whether it is worth it. This article does not take a side, because the evidence it has establishes the mechanism and not the welfare arithmetic.

What the fund is actually for, and what it became

Here is the structural point, and it is article 92’s.

A shock absorber is designed to be compressed and then to recover. It borrows from the good years to pay for the bad ones, and the discipline that makes it work is that the good years actually repay it.

A fund that is ฿80 billion down, borrowing, spending ฿770 million a day and heading for ฿100 billion is not absorbing a shock. It is carrying a price.

And the Act appears to have anticipated exactly this, which is why section 55 has a deadline and a countable number of extensions rather than a review clause. Somebody drafting in 2019 understood that a temporary subsidy with no end date is a permanent subsidy, and wrote in an end date. Two extensions later, the end date has arrived in the middle of a war.

Article 178 Published to whom has already shown what happens downstream when fuel moves faster than a regulated price can follow. Before the April fare rise, bus operators had cut services by a fifth. The fund is the reason that was a fifth rather than everything.

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Common misconceptions

“The government pays for the fuel subsidy out of taxes.” Largely not. The fund is fed by levies on fuel — so the subsidy is substantially paid by fuel users, and the fund has also borrowed ฿10 billion of an authorised ฿20 billion.

“The fund has to stop subsidising fuel on 24 September.” No, and this is the most likely thing to be got wrong. Section 55 concerns compensation for biofuel-blended fuel, and after the deadline that support becomes available in a crisis rather than as normal practice.

“Thai fuel is expensive compared with the region.” The fund’s office puts Thai diesel third or fourth in ASEAN — slightly above Malaysia, below most of the rest, trading places with Vietnam.

“The deficit means the fund has run out of money.” It means it has paid out more than it has taken in and is carrying that as a negative balance, with a borrowing facility behind it.

“A third extension can just be granted.” Section 55 permits not more than two, and both have been used. Anything further is a different legal act, not a renewal.

“So the subsidy stopped on 24 September.” It did not. The Council of State’s reported opinion is that the fund’s committee keeps its power under section 14(4) to set compensation rates for blended fuel, and the Cabinet-approved crisis plan, as reported, permits compensation whenever diesel or petrol is above ฿30 a litre. Diesel was ฿41.87 on 24 September.

“There is no definition of a crisis.” There now is. The 2026–2029 crisis plan sets three triggers — price, volatility and shortage — with numerical thresholds.