Expert opposes termination of Thailand's state oil fund

BANGKOK, July 6 (TNA) - A Thai energy expert has expressed his opposition to a plan to shut down the state oil fund, as recently announced by Thailand's new majority-elected Pheu Thai Party, insisting that the state oil fund will remain beneficial to the national economy if efficiently managed.

The Thai expert, Manoon Siriwan, suggested on Wednesday, instead, that the government utilise the state oil fund only when it is necessary, namely during an energy crisis, and should not use the state oil fund to subsidise retail prices of certain types of fuel for a long period of time, as it distorts the market mechanism with adverse effects.

Manoon warned if the new Thai government finally decided to terminate the state oil fund, it would be obliged to clear all debts of the state oil fund, now standing more than 20 billion baht, incurring by the outgoing government's persistent policy on capping domestic retail prices of diesel, liquefied petroleum gas (LPG) and natural gas for vehicles (NGV). Besides, the new Thai government would be obliged to effectively address the emerging problem of a surge in retail LPG, NGV, gasohol E20 and E85 prices once the state oil fund was terminated.

In response to a proposal on the setting up of a national petroleum reserve system, to replace the state oil fund, Manoon said that the petroleum reserve system is not suitable for Thailand due to its immense investment of hundreds of thousands baht and a doubt in its practicality and efficiency. (TNA)