Diesel Price Raised To Bt18.19 From Tonight

[george]

Govt decides to raise diesel price by Bt3.0 per litre

BANGKOK: -- TheThe government has decided to raise the diesel price on the domestic market by Bt3.0 per litre, from Bt15.19 per litre to Bt18.19 per litre.

The move will take effect just after Tuesday's midnight, according to Energy Minister Viset Choopiban.

Mr. Viset told TNA that the decision on the outright increase in the diesel price was agreed at a meeting of economic ministers, chaired by Prime Minister Thaksin Shinawatra, at the Government House here this morning.

The economic ministers attending the meeting include Mr. Visit himself, Deputy Prime Minister and Finance Minister Somkid Jatusripitak, Commerce Minister Thanong Bidaya, Transport Minister Suriya Jungrungreangkit and the prime minister's chief advisor, Pansak Vinyarat.

"We now need to raise the domestic diesel price due to the continual oil price hike on the world market and the government's state oil fund has had to spend at least Bt77.5 billion so far to shoulder the difference between the real market price of diesel and the subsidized price, at around Bt6.50 per litre, or as high as Bt300 million per day", disclosed the energy minister.

"The increased diesel price will reduce the burden of the state oil fund by half, or by Bt150 million per day", he noted.

The outright increase in the diesel price, instead of the other alternative approach of a step-by-step increase, is aimed mainly at preventing hoarding of consumers' goods and profiteering of local manufacturers and traders, citing the uncertainty of the diesel price as an excuse, according to the energy minister.

"There will be no more increase in the domestic diesel price over the coming months unless the price of Dubai crude oil shoots up to exceed US$50 a barrel", Mr. Viset promised.

The price of Dubai crude oil now stands at US$45 a barrel.

Mr. Viset conceded that the increased diesel price could affect the country's gross domestic product (GDP) by 0.75 percent and the inflation by 0.35-0.50 percent.

However, agencies concerned, particularly the Ministry of Commerce and the Ministry of Transport, would implement measures to control the prices of consumers' products and transport costs so that they would remain at their rational levels, he said.

The government would also launch campaigns to promote energy saving and use of alternative energy, namely gasohol, among local consumers and motorists, Mr. Viset added.

--TNA 2005-03-22

[george]

Update:

Govt prepares measures to ease impacts from diesel price hike

BANGKOK: -- The government is set to come up with measures to help certain groups of people in the economic sector following its decision to increase a diesel price outright by three baht per liter this morning.

Prime Minister Thaksin Shinawatra said Deputy Prime Minister and Finance Minister Somkid Jatusripitak had already prepared the measures to ease impacts from the outright diesel price surge.

He said the government needs to raise the diesel price since global prices had increased to US$40-50 per barrel.

Previously, the world oil prices stayed at US$30-40 per barrel when the government pegged the local diesel price at 15.19 baht per liter.

“Should the prices on the world market edge up to more than US$50 per barrel, we need to raise the diesel price further. However, it is expected that the prices will not surpass that level for a while,” he said.

On measures to ease impacts on fishery, transport costs and consumers' products prices, he said Energy Minister Viset Choopiban would explain by himself about the measure to help local fishermen, while Transport Minister Suriya Jungrungreangkit would take a couple of days to consider how to help transport operators.

He said the Commerce Ministry would also closely supervise the product price increase.

The ministry would identify which kinds of products rely on diesel oil for production, Mr. Thaksin added.

“I'm not worried about the impacts on the political popularity from the diesel price rise because many parties realize that the current price is much lower than it should be and there is a problem about the structure. More importantly, we still subsidize the fuel price although it is allowed to rise to a certain extent. Now, we don’t want to deviate the oil price structure too much,” the prime minister said.

The premier conceded that the sharp diesel price hike would ease the country’s gross domestic product (GDP) to a certain extent.

The National Economic and Social Development Board (NESDB) would have to decrease the GDP growth to 5.25-6.25 percent, from its earlier estimate of 5.5-6.5 percent, he said.

He said the GDP in the first quarter would be rather adversely affected due to many negative factors.

The inflation rate would stay at around 3%, he noted.

--TNA 2005-03-21

[meadish_sweetball]

Hurry, hurry, empty out those empty bottles of stale old Chang and fill them up for all your money. Tomorrow you can make a 10% profit on ALL your savings. Do it NOW!!!

:-)

[flackjacket]

Hurry, hurry, empty out those empty bottles of stale old Chang and fill them up for all your money. Tomorrow you can make a 10% profit on ALL your savings. Do it NOW!!!

:-)

<{POST_SNAPBACK}>

Of course the Thai Government says it will not fuel inflation and cause price rises, dreamers all. Same old story "Its the rich wot gets the pleasure and the poor wot gets the pain".

Be interesting to see just how soon price increases appear on the market, one thing to be sure, it will mean another 3 passengers in the back of pickups!!

[stumonster]

would I be considered cynical if I presumed the prime ministers recent personal trip to japan was to meet with banks to transfer a fair bit of his baht cash reserves.

this on top of the problems being caused by drought surely will not help the baht.

[ovenman]

would I be considered cynical if I presumed the prime ministers recent personal trip to japan was to meet with banks to transfer a fair bit of his baht cash reserves.

Nah. It would have been cynical to suggest that he was buying up millions of litres of diesel yesterday at Bt. 15.19 so he could sell it tomorrow.

[RamTodatry]

Would it not have made sense to increase the price of premium gasoline at the same time to offset the remaining diesel subsidy. Would have eliminated the balance of 150+ million baht of state funded subsidy, and made some motorists think twice about not using the subway/skytrain or the buses.

It would also make sense to keep the increases on premium gasoline until previous subsidies were recaptured. This would not have ANY effect on the GDP.

It is ridiculous what people here pay for gasoline, and then complain about traffic congestion and pollution.

[astral]

I wonder how a 20% hike in the diesel price can happen and inflation will still stay at 3%.

Where did the minster and his staff learn maths?

[Anon999]

Would it not have made sense to increase the price of premium gasoline at the same time to offset the remaining diesel subsidy.  Would have eliminated the balance of 150+ million baht of state funded subsidy, and made some motorists think twice about not using the subway/skytrain or the buses.

It would also make sense to keep the increases on premium gasoline until previous subsidies were recaptured.  This would not have ANY effect on the GDP.

It is ridiculous what people here pay for gasoline, and then complain about traffic congestion and pollution.

<{POST_SNAPBACK}>

With light crude trading at over US$57 a barrel, having reached US$57.45, because of worse than expected depleted stocks in the USA and the threat of a strike in Nigeria it does not look hopeful that the price will go down in the near future. Sixty US$ a barrel is a more likely scenario which could happen if there is a cold snap to increase demand.

This is not a short term problem as expanding economies like China and India are making massive extra demands on the supply of crude oil. Alternative energy sources are just not available and/or viable yet. So what is the solution? Someone has to come up with an answer before we all come to a grinding halt. Not to mention how much a litre will cost by then?

In the meantime the price of petrol will have to increase as it is the only way to get people to look at other travel options and reduce unnecessary journeys. If it gets more people onto public transport and results in less traffic and polution then the savings will be significant. However, in every country people become married to their cars and many I am sure would rather divorce their wife than stop using their car.

[sriracha john]

Be interesting to see just how soon price increases appear on the market,

as per the thread title... prices for EVERYTHING trucked or shipped or

diesel-railroaded will increase... most likely from tonight on....

that evil monster "Inflation" is lurking hungrily and greedily in the corners....

[BlackJack]

put the price up to 50 baht per ltr

force cars and badly maintained buses off the road and force people into using the sky train and subways

1 car 1 person mentality is pre 2000

car pooling etc is the go

1 mum driving 5 neighbourhood kids to the same school

think people think

no too hard - maikow chai

[ovenman]

force cars and badly maintained buses off the road and force people into using the sky train and subways

Nice thought but the vast majority of the Thai population does not live in Bangkok.

[toastwars]

Perhaps this will start a much needed trend of conservation and conversion to more lpg fueled transport, The threat of short term inflation is dwarfed by the very real costs of polution, ill health and shorterned life spans cost the economy much more in real terms than a minor glitch in inflation rates, that in real terms has been offset by the subsidy anyway. America should have done this long ago but made the ludicrous desition of putting increased oil production before conservation. Selling the idea as American energy self reliance it was doomed to fail as it is now because US oil reserves account for 7% globally not enough to last long term, it has turned into a drain America first policy making it more dependant on foreign oil when the intelligent action would have been to reduce use. Too many oil executives weilding too much influence in this world to allow the right decisions to be made

Edited March 22, 2005 by toastwars

[TizMe]

You cant deliver your goods to market in Ayuttaya on the sky train or subway.

[toastwars]

We all know that reducing the amount of unessasary car journeys in Bankok would have a hugely positive benefit for all residents and the economy, how many working hours are lost due to "rot tip?" the benefits to the many if this price rise is dealt with in a sensible way and used as a catalyst to reduce over use of the car will far outway the short term inconvenience to the few, Thailand is very capable of adapting

Edited March 22, 2005 by toastwars

[bluie]

I know how much we pay for Diesel in the UK but don't tell the boss

he might get some ideas

[bkk_mike]

force cars and badly maintained buses off the road and force people into using the sky train and subways

Nice thought but the vast majority of the Thai population does not live in Bangkok.

<{POST_SNAPBACK}>

The vast majority of Bangkok lives nowhere near the skytrain or the subway.

Be real people - the only existing way around Bangkok (unless you're in the very centre) is by car. I'll admit there's an exception if you happen to want to go somewhere where you have a local bus to get there. - But I would have to take 2 songthaews to get to the nearest bus stop. (and yes - I live in a district of Bangkok)

Until the skytrain / monorail / subway / whatever, gets built out beyond Sukhumvit, any talk of people not using cars is utter &lt;deleted&gt;.

[marquess]

I wonder how soon it will be before Taxi fares are raised?

[jayenram]

put the price up to 50 baht per ltr

force cars and badly maintained buses off the road and force people into using the sky train and subways

<{POST_SNAPBACK}>

No sky trains or subways in Issarn. Only badly maintained buses. Admittedly I could take a badly maintained bus into town on condition that I return at 17:00 hours (last bus). Other than that, I could take a badly maintained tuk-tuk. Or I could take my very well maintained truck.

You are not from London, are you?

[jayenram]

Hurry, hurry, empty out those empty bottles of stale old Chang and fill them up for all your money. Tomorrow you can make a 10% profit on ALL your savings. Do it NOW!!!

:-)

<{POST_SNAPBACK}>

No stale *chang* in my house!

[bangkapiboy]

Taxi fares are going to go up then.

[jayenram]

Taxi fares are going to go up then.

<{POST_SNAPBACK}>

You can't be serious!

[taxexile]

[george]

Update:

Finance Minister rules out more diesel price hikes

BANGKOK: -- The government will not seek to raise the price of diesel again this year unless global oil prices exceed the USD50 per barrel mark, Finance Minister Somkid Jatusripitak confirmed today.

The announcement will come as welcome news to businesses and householders who this morning were hit by the blow of a Bt3 per litre rise in the price of diesel.

This afternoon Mr. Somkid sought to shrug off criticism over the sudden rise, saying that although diesel subsidy had helped support economic growth last year, soaring world oil prices at the beginning of 2005 had forced the government's hand.

While in the past, the government had shouldered the heavy burden of rising oil prices, it was now time for all parties to help out, he said.

"This will have an impact on the economy", he conceded, "but I am confident that it is manageable, and that the public can take on the burden".

However, he warned of the need for everyone to help conserve energy use if Thailand was to achieve its economic growth target of 5-6 percent and to keep inflation within the 3-4 percent band.

Nonetheless, he remained optimistic that world prices had already reached their apex, and said that unless global prices, particularly those on the Dubai market, exceeded USD50 per barrel, the government would not seek to introduce any further diesel price rises this year.

An upbeat assessment of the situation was also given by the Economic and Business Forecasting Centre at the University of the Thai Chamber of Commerce, whose director, Mr. Thanawat Polvichai said that while the economy faced a number of risk factors, including rising diesel prices and the drought, government measures would work to sustain economic growth.

The centre estimates that the diesel price hike will put a 0.6-0.7 percent dent in the country's gross domestic product (GDP) growth, already battered by both the 26 December tsunamis and the current drought conditions.

As a result, the centre predicts the country's GDP growth for the year as a whole to stand at 4.7-5.2 percent.

But Mr. Thanawat was keen to stress that government mega projects would do much to alleviate the situation, as they would serve to pump money into the economy.

Nonetheless, he warned that the prices of consumer goods were set to shoot up by 5-10 percent, while interest rates were almost certain to rise in the third quarter of the year.

--TNA 2005-03-22

[AndyW]

I would have thought the main worry was not the affect on our personal use of fuel, but the price hiking all round as a result. This will be used as excuse for inflation on all goods, even though transportation is only one part of the total cost. Take for example the recent price increase in steel for construction. The actual price increase according to the Bangkok post was 300 baht per tonne (from 21,000 bt per tonneto 21,300). One builder quoting me for my house managed to turn this into a 10% price hike....

[penzman]

Suppliers are also hiding stock from small distributors until there are increases.

They also cheat on quantities. A spool of electric wire now contains 90 meters only instead of 100 for the same price.

Another example is thinner. Check out the bottles next time you're at the hardware store. The bottles look like soy sauce bottles and they are only 3/4 full.

[Robby nz]

You don't know how lucky you are

Here in NZ the Govt adds clost to 50% tax to fuel and more to come

We also have road user tax on all deisel vehicles paid by the KM in advance

[ovenman]

BANGKOK: -- The government will not seek to raise the price of diesel again this year unless global oil prices exceed the USD50 per barrel mark, Finance Minister Somkid Jatusripitak confirmed today

Somebody want to tell the whiz-kid that the prices are basically already there?

[Phil Conners]

Duh, you pay 5x higher road tax on a diesel car here too

[ovenman]

Taxi fares are going to go up then.

You can't be serious!

I don't think that taxis generally run on diesel (do they?). As a side issue though, I'm pretty sure that the taxi meter rates have not been increased since the initial introduction of the meters in the early 1990's. They are way overdue for a rate increase. This issue been talked about from time to time but no action has ever been taken.