Fuel shock: Thailand hikes petrol and diesel tax as oil prices drop
Timing of tax hike raises questions amid economic strain and rising cost of living pressures
Motorists across Thailand are bracing for higher fuel prices after the government officially announced a fresh hike in excise taxes on petrol and diesel, just as global oil prices are falling.
The move was confirmed by a new ministerial regulation published in the Royal Gazette and will take effect from today, May 7. Issued by the Ministry of Finance, the regulation updates tax rates under the Excise Tax Act of 2017, sparking concern over its potential impact on consumers already grappling with cost-of-living pressures.
Labelled as the 42nd regulation of 2025, the updated law revamps previous excise tax rates on petrol and similar oil products listed under Section 1.1. Items (1) through (5) of the old provisions have been scrapped and replaced with new taxation guidelines.
The changes don’t stop there. Under Section 01.05, which deals with diesel and related products, both items (1) and (2) have been removed. Additionally, items (5) through (5/5) have been cancelled and replaced with revised provisions. The revised tax rates apply to multiple categories of fuel products.
According to the Ministry of Finance, the primary reason behind the tax increase is the global trend of declining crude oil prices, which presents a rare opportunity for the government to boost revenue without causing an immediate fuel price spike, at least in theory.
Officials argue that increasing the excise tax will help stabilise the economy and strengthen state finances. By capturing more revenue from fuel sales while international prices remain relatively low, officials hope to improve fiscal resilience amid ongoing economic uncertainty.
“The adjustment is necessary to ensure fiscal soundness and economic stability,” the ministry stated, noting that the timing is strategic given current market conditions.
While no specific figures were provided in the Royal Gazette announcement, the tax hike is expected to translate into higher pump prices shortly, affecting consumers and businesses, reported KhaoSod.
As the regulation takes effect, economists warn that any unexpected rise in global oil prices could quickly reverse the government’s assumptions, pushing fuel costs even higher and triggering backlash from the public.
In short, you’ll soon be paying more at the pump, even as oil prices fall.
Latest Thailand News
Follow The Thaiger on Google News:
