Bangkok, March 26 -- Thailand has abandoned attempts to cap domestic fuel prices, which have been driven up by the Middle East conflict, and will instead offer targeted assistance to the sectors hardest hit by high prices.

The government will allow domestic energy prices to move in line with market forces, Thai Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas told a television news programme on March 25, adding that price suppression had led to market distortions, hoarding, and unnecessary budget losses.

On March 2, the Thai government announced price caps on the most widely used transport fuels, saying it would not allow diesel prices to exceed 33 THB (1.01 USD) per litre. As a result, the state Oil Fuel Fund spent 20 b...