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Plug pulled on diesel cap

BANGKOK: The government has appealed for public understanding over its decision to lift the B30-per-litre diesel price cap next month.

natural-resourcesRussianeconomics
By Bangkok Post

Wednesday 27 April 2022, 09:50AM


Motorists refuel their vehicles at a petrol station on Nawamin Road in Bangkok. Photo: Varuth Hirunyatheb

Motorists refuel their vehicles at a petrol station on Nawamin Road in Bangkok. Photo: Varuth Hirunyatheb

Prime Minister Prayut Chan-o-cha said yesterday (Apr 26) he is ready to listen to alternative proposals from members of the Land Transport Federation of Thailand (LTFT) at Government House today after signalling an end to the subsidy from May 1.

Prayut said the Fuel Oil Fund which had been pumping in cash to keep the price down is now severely depleted while loans sought to support the fund have also run out, reports the Bangkok Post.

“People should understand the limits of the government’s capacity to help. The increase in the price of diesel will have an adverse impact on people and lead to inflation. Now is the time for everyone to cooperate and the government is ready to take care of people,” Prayut said.

LTFT chairman Apichart Prairungruang said haulage industry representatives will formally lodge their opposition to the removal of the cap at Government House today and ask the government to come up with measures to ease the plight of those affected.

Deputy Prime Minister and Energy Minister Supattanapong Punmeechaow explained yesterday that from May 1, the government will still help subsidise the diesel price, but to a lesser extent.

“The retail price of diesel is now at B40 per litre. The amount that is beyond the B30 cap is B10 per litre. If the government subsidises half of the price above B30 a litre, the new cap will be B35 per litre.

“The Energy Ministry will monitor the situation to ensure that price rises happen gradually. We will not do an immediate jump to B35 per litre as people will be in trouble.

“The permanent secretary for energy will consider how much the government can subsidise - maybe 31, 32 or 33 per litre. It will gradually increase. Therefore, the government will subsidise more than 50% by using money from the Oil Fund,” Mr Supattanapong said.

Asked if it is possible to adjust the diesel price in line with the benchmark international rate, Mr Supattanapong said: “Not quite. If the government has the resources, we will continue to help. We are still in recovery.”

He said the government will need three months to assess the situation before deciding whether to allow the domestic price to fall in line with global prices.

Mr Supattanapong also urged the private sector to help by reducing production costs rather than raising consumer prices.

As of Apr 19, the government, through the state Fuel Oil Fund, subsidised the diesel price at B11.21 per litre as part of an aid pledge to freeze the price at B30 per litre until the end of this month.

Domestic diesel consumption totals about 65 million litres per day, 1.4mn of which are premium diesel.

The cabinet on March 29 approved revoking the subsidy for premium diesel used in luxury cars, effective from April, in a move to save on budget expenses.

The cabinet previously approved lifting the borrowing limit on Mar 15 for the state Fuel Oil Fund to allow for management flexibility, a move that offers the government more room to cope with surging fuel prices caused by the Russia-Ukraine conflict.

As of Apr 17, the Office of the Fuel Fund reported the state Fuel Oil Fund was B50 billion in the red.

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Paddy | 27 April 2022 - 12:07:50

The old age pension here is 700 baht per month , believe it or not but it's true.

JohnC | 27 April 2022 - 11:02:14

Good sentiments nasa12 but sadly most elderly Thais don't even get a pension at all so they have nothing to live on except what their children provide for them. The 1000s of retired generals have been hoarding away other people's money their whole carreers to have a "comfortable" retirement so they don't even need the guaranteed income they get for the rest of their lives. Eq...

Nasa12 | 27 April 2022 - 10:24:24

Here you have one alternative: The government can get the money easily. Simply scrap ALL future purchases by the military, reduce the military by at least 50% and turn it into a professional military. Scrap conscription completely. Sack all the1000’s of retired generals and let them live on the pensions that the elderly Thais HAVE to live on.

 

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