Economy Thailand Announces Fuel Tax Hike Despite Falling Global Oil Prices

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Photo courtesy of Nikkei Asia

 

Motorists in Thailand are set to face increased fuel prices as the government enacts a new hike in excise taxes on petrol and diesel. The heightened taxes take effect today, May 7, following their publication in the Royal Gazette, and come amid declining global oil prices.

 

The tax adjustment, implemented under the Ministry of Finance’s updated regulation, is an amendment to the Excise Tax Act of 2017. It revamps existing tax rates, drawing concern from consumers already burdened by rising living costs.

 

Designated as the 42nd regulation of 2025, the law revises tax rates on petrol and related oil products under Section 1.1, with several older provisions scrapped and replaced. Moreover, Section 01.05, dealing with diesel, sees substantial changes, with outdated items removed and new guidelines introduced, covering various categories of fuel products.

 

According to the Ministry of Finance, the tax increase capitalises on the current trend of declining crude oil prices, offering the government a chance to increase revenue without immediately impacting fuel prices drastically. Officials believe this measure will stabilise Thailand’s economy and bolster state finances, ensuring fiscal resilience during uncertain economic times.

 

“The adjustment is necessary to ensure fiscal soundness and economic stability,” the Ministry highlighted, indicating the strategic timing aligned with current market conditions.

 

However, the precise impact on pump prices remains unspecified as the Royal Gazette lacked detailed figures. Economists caution that an unexpected rise in global oil prices could negate the government's fiscal strategy, potentially leading to even higher fuel costs and public discontent.

 

As a result, motorists should prepare for higher fuel costs, contrary to the backdrop of falling global oil prices.

 

  Adapted by ASEAN Now from The Thaiger 2025-05-07