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Director-general Metta Bantherngsuk said ahead of the cut in excise taxes on gasohol and diesel, 1,700 staff will inspect 15,000 service stations and 100 oil depots nationwide on the evening of July 25.

All service stations will close from midnight on July 24 to 5am on July 25.

He said the Oil Fund will pay out compensation within a week.

"All operators must sell fuels at lower prices and they will be compensated for the loss. Failure to comply with the law could result in legal charges," Metta said.

The Oil Fund now earns Bt100 million a month and has about Bt3 billion in reserves. It is financially able to shoulder the compensation and the government would return this and a similar amount when the tax cut ends in the next 6 months.

A source from the Energy Ministry said that the next meeting of the National Energy Policy Committee will ask for the Oil Fund's financial help in keeping the price differential of biodiesel B5 and diesel at 70 satang per litre.

The excise tax cut will narrow the difference to 50 satang, which may reduce biodiesel demand. To shoulder this burden, the Oil Fund would need to pay out Bt2 million a day.

The difference of 70 satang is attributed to the sharp increase in biodiesel B5 consumption from 4.5 million litres a day in January to 10 million at present.

Meanwhile, Metta noted that the department has not yet been notified of the import of cheap diesel from Russia by Syrus Petroleum. Syrus, not a legal importer by law, needs approval from the department as well as the Pollution Control Department for the imports.