BANGKOK : The Cabinet on Tuesday (Aug 16) approved an executive decree that would enable the Finance Ministry to guarantee a loan of 150 billion baht to be borrowed by the Oil Fuel Fund.

The executive decree was proposed by Energy Minister Supattanapong Punmeechaow, a source from the Cabinet meeting said.

The decree enables the Finance Ministry to guarantee a loan for the Oil Fuel Fund with a ceiling of 150 billion baht.

The decree states that the Office of the Oil Fuel Fund will be the agency to seek the loan.

Deputy Prime Minister Wissanu Krea-ngam confirmed that the Cabinet had issued the decree.

Wissanu said the decree would later be sent to the Council of State for scrutiny before it would be sent to the House of Representatives for endorsement.

“For the time being, the Oil Fuel Fund will definitely wait for endorsement by the House before it borrows the loan,” Wissanu said.

“The fund will not rush to borrow the money because the loan is not that urgently needed.”

According to the source, the energy minister reported the current financial status of the oil fund to the Cabinet as part of the proposal for the loan guarantee decree.

Supattanapong reported that the fund has accumulated a deficit of 177.394 billion baht as of Aug 14 -- 76.518 billion baht oil subsidy deficit and 40.876 billion baht for LPG gas subsidy deficit.

The Russia-Ukraine conflict had led the fund to accumulate a monthly deficit of 20 billion baht from March to June.

The energy minister said the fund is expected to accumulate a deficit of 200 billion baht by the end of this year if it continues to subsidise oil and LPG at the current rate.

 - ANN