Diesel Prices Will Surge To 21 Baht/liter

[george]

PM reaffirms intention to raise diesel prices

BANGKOK: -- Prime Minister Thaksin Shinawatra yesterday reaffirmed the government’s intention to raise local diesel oil prices, saying the prices would surge by 3 baht per liter immediately if they were floated.

He said the government had already decided on the increase of the diesel prices. Now, it was in a process of determining when the price increase would be put into effect.

“We are considering a proper date for the price rise. It will not be far from now.”

Asked whether the diesel prices would be floated along with the global fuel prices, he said the floatation is unavoidable. However, the managed float would be adopted for the price rise.

Meanwhile, Arch Taolanont, Honorary Chairman of Thai Chamber of Commerce, suggested the government allow the diesel prices to float although it meant the price would rise by 3 baht to 21 baht per liter.

The move would create clear understanding, help ease trade deficits and make the market reflect an actual condition.

Should the diesel prices be floated immediately, people would automatically reduce their spending.

He conceded the floatation of diesel prices would more or less affect costs of products, but it would help reflect the actual costs.

--TNA 2005-05-31

[jayenram]

PM reaffirms intention to raise diesel prices 

He conceded the floatation of diesel prices would more or less affect costs of products, but it would help reflect the actual costs.

--TNA 2005-05-31

<{POST_SNAPBACK}>

His degree in economics must have assisted him here.

[LaoPo]

PM reaffirms intention to raise diesel prices 

Meanwhile, Arch Taolanont, Honorary Chairman of Thai Chamber of Commerce, suggested the government allow the diesel prices to float although it meant the price would rise by 3 baht to 21 baht per liter.

<{POST_SNAPBACK}>

21 Baht/liter....Holy Moly....In many EU countries it is 7, 8 or 9 times that amount. Wish it was here.

LaoPo

[george]

Update:

Cabinet will conclude diesel price floatation today, says PM

BANGKOK: -- Prime Minister Thaksin Shinawatra disclosed a final conclusion on the widely expected floatation of local diesel oil prices would be made at the cabinet's meeting today.

He conceded the floatation was unavoidable now that crude prices in the world market had edged up again.

Asked how the government would allow the fuel to float, he said the “managed float” system would be adopted. Under the system, it would take some kinds of subsidy measures to prevent the fuel prices from rising too high.

He said all necessary measures would be issued simultaneously to ease impacts from the diesel floatation.

Asked how the government would try to prevent wide-ranging repercussions, the premier said: “we all have to help save fuel consumption because its prices are much higher. Actually, everybody will save automatically when fuel is expensive. It is a matter of demand and supply.”

--TNA 2005-05-31

[stumonster]

the premier said: “we all have to help save fuel consumption because its prices are much higher. Actually, everybody will save automatically when fuel is expensive. It is a matter of demand and supply.”

you prick.

and when people cannot afford food transported by the diesel trucks , I hope they cut his nuts off and barbeque them

[marquess]

Forgive my stupidity! But if the subsidy is removed, we are the ones who have to pay the full price. Where does the gov lose out financially.

[george]

Govt decides to float diesel price within manageable framework

BANGKOK: -- The government has decided to float the price of diesel on the domestic market within a manageable framework, taking effect as of 1 June, Energy Minister Viset Choopiban announced today.

The government has, however, agreed to cut the excise tax on diesel by Bt1.0 per litre over the next six months, and by another Bt0.50 per litre for further four months.

"This will help ease the burden of the state oil fund in shouldering the difference between the real price of diesel and the government's capped price over the past year, from Bt2.86 per litre to Bt1.76 per litre. It will also prevent the retail diesel price to immediately soar", said Mr. Viset.

The energy minister said that the excise tax on diesel would be cut to Bt1.305 per litre, from Bt2.305 per litre, over the next six months.

"The cabinet approved the measures at its weekly meeting here today, aimed at curbing the domestic consumption of diesel oil, which has been rising and has cost a huge trade deficit to the nation due to increased oil imports", he noted.

He said, however, that the domestic diesel price would not be fully floated until the end of this year, or early next year when the government ends its subsidy to the state oil fund.

Meanwhile, local oil traders reportedly disagreed with the government's decisions, saying the measures would not prompt the general public to reduce diesel consumption, as the diesel price would still not reflect its real cost, cushioned by the tax measures.

--TNA 2005-05-31

[Big Guns]

If he has a degree in economics he would know that demand for diesel is inelastic. Hence price would have to increase dramatically to cause demand to fall. I don't think a price increase will have a huge effect on consumption as people are unlikely to switch to public transport instead of using their pickups.

[sriracha john]

Actually, his degree is in criminal justice (but then, he doesn't demonstrate any knowledge of that subject either)

A few further details on diesel issue:

Energy Minister Viset Choopiban said the diesel fuel subsidy program was introduced 16 months ago and has cost the government Bt88 billion.

The government believes this is the right time to float the diesel fuel price as global oil prices are less volatile right now, Viset said.

Even though the diesel fuel subsidy ends this Wednesday, Viset said the tax breaks mean prices at the pump will not change immediately as government gradually shifts towards the new system. However, consumers will start to notice the change within a few days, he said.

According to Viset, the government plans to remove the tax breaks in 10 months. The tax break scheme will cost Bt14 billion during that period.

---------

So all told, it will have been 100 billion baht out of the budget.

I'm not relishing the amount of conflict this is sure to stir up with the fishing and trucking sectors... particularly if world oil prices go up even higher and they are looking at 25B/L

[stumonster]

does anyone have any comments on this article from asia times online.

Global Economy

    May 26, 2005

The real problems with $50 oil

By Henry C K Liu

http://www.atimes.com/atimes/Global_Economy/GE26Dj02.html

I warn you it is quite long , but I found it interesting.

I have it bookmarked as I intend to go through it again , but I would be interested in points of veiw before I do so.

[penzman]

This is quite convenient for a handful of people running the show and profiting from it now that the roads have been crammed with diesel powered pick-up trucks.

[stumonster]

the premier said: “we all have to help save fuel consumption becauseits prices are much higher. Actually, everybody will save automatically when fuel is expensive. It is a matter of demand and supply.”

and its been confirmed that all bus , minibus and intercity bus fares are to rise. only the beginning... is there a phrase in thai similar to 'hoist him with his own petard'?

[mnoorsapl]

does anyone have any comments on this article from asia times online.

Global Economy

     May 26, 2005

The real problems with $50 oil

By Henry C K Liu

http://www.atimes.com/atimes/Global_Economy/GE26Dj02.html

I warn you it is quite long , but I found it interesting.

I have it bookmarked as I intend to go through it again , but I would be interested in points of veiw before I do so.

<{POST_SNAPBACK}>

Thanks for the links. Agreed interesting.

[bdenner]

There you go, Thaskin did learn something from his recent visit to Australia where the price signs at most “Service” Stations (there’s a contradiction in terms) showing diesel being 10 to 15% higher than ULP.

For Howard’s part it’s all a tax rip off with the oil companies cashing in, those who don’t know the refining costs for diesel is a fraction of that for ULP.

At least it might help get rip of them olde smoke belching, under powered, overloaded Isuzu trucks!