The retail price of diesel in Greater Bangkok will rise above the 30-baht capped price to 32 baht per litre this Sunday morning, according to the Oil Fuel Fund Office (Offo).
The current price is 29.94 baht per litre.
The removal of the price cap - despite protests from truck owners - is intended to decrease the huge cost of the government's subsidy scheme, which has limited the diesel price to 30 baht per litre since early March. The Oil Fuel Fund, which pays the subsidy, was 56 billion baht in the red, Offo said.
Kulit Sombatsiri, permanent secretary for energy, said the Offo committee on Wednesday approved the price hike to 32 baht to ease the subsidy burden.
Offo's diesel subsidy fell to 9.55 baht per litre on Thursday morning, he said. It was at 9.57 baht per litire last Friday.
Offo is expected to further increase the retail price but the timeframe and the next increment was not disclosed.
Mr Kulit said Offo will also stop subsidising the premium diesel price and gradually lower its subsidy for gasohol E85 petrol.
As of Tuesday, the Oil Fuel Fund was 56.28 billion baht in the red, including losses of 24.30 billion baht for oil and 31.98 billion baht for cooking gas.
A 20-billion-baht loan to maintain the fund's liquidity is expected in June.
Last month the cabinet approved an additional loan of another 10 billion baht to keep the fund operational.
