Thailand’s government will likely keep diesel subsidies

After much drama and anxiety over announcements that Thailand’s diesel price could eventually jump to 40 baht per litre, PM Prayut Chan-o-cha has announced yesterday that the government will likely extend its subsidy programme that is due to end on May 20.

The current subsidy has helped keep the price at about 32 baht per litre, even though the actual retail price is now 40 baht per litre. Last month, Thailand’s Energy Permanent Secretary said the new ceiling price for diesel would be set at 35 baht per litre. He said the Fuel Fund Executive Committee would consider when the price would be further increased by one baht per litre up to the 35 baht per litre ceiling.

Prayut says that lowering the excise tax per litre on diesel by 3 baht has cost the government about 17 billion baht in revenue in total. He added that the Finance Ministry will forward a proposal about the subsidy to the cabinet for consideration on May 17, he said.

But raising the price cap from 30 baht per litre to 32 baht has already brought about outrage in Thailand. Last month, angry truck drivers rallied in front of Government House in Bangkok to demand that the price cap continue. And they called for the Energy Minister, Supattanapong Punmeechaow, to be removed. The truckers called for removing biodiesel from the system, which would help reduce the price by 1.5-2 baht per litre, as biodiesel prices are as high as 56.4 baht per litre.

SOURCE: Bangkok Post | Global Petrol Prices | Thai PBS World