Increasing the role of biofuels was another priority for reducing reliance on imports during a period of volatile global energy prices, the Energy Ministry source said. The pricing structures for biodiesel and ethanol still needed discussion because domestic feedstock costs remained high.<\/p>\n
The Energy Ministry source also identified the Middle East conflict as a continuing concern, saying the fighting was likely to be prolonged and international fuel prices could remain elevated despite recent short-term declines.<\/p>\n
Oil Fuel Fund weighs gradual cuts to price support<\/p>\n
The Energy Ministry source said the Oil Fuel Fund could also gradually withdraw from price caps or reduce subsidy payments to slow the outflow of money. Either approach would push retail fuel prices higher, requiring an assessment of the impact on consumers and discussions with the government about targeted assistance or other relief.<\/p>\n
\u201cBorrowing is one option under the crisis plan. Another is to withdraw subsidies, but that could affect the public. We need to assess how much prices would rise and what measures the government could introduce to ease the impact,\u201d the Energy Ministry source said of the Oil Fuel Fund\u2019s options.<\/p>\n
The Energy Ministry source said preparations for fresh borrowing needed to move quickly because the Oil Fuel Fund could not sustain energy subsidies over the long term. The amount and structure of the borrowing would be finalised after policy discussions with the ministry\u2019s new leadership.<\/p>\n