Thai Govt Seeks Ways To Ease Energy Price Burden

[webfact]

Govt seeks ways to ease energy price burden

By WATCHARAPONG THONGRUNG

THE NATION

The government is mulling measures to lessen the impact of rising diesel and other energy prices, and could use petroleum royalties worth Bt4 billion to Bt5 billion per year to subsidise the price of liquefied petroleum gas (LPG).

With the Finance Ministry steadfastly refusing to reduce excise duty on the price of diesel, a fuel which has exceeded Bt30 per litre at the pump, Prime Minister Abhisit Vejjajiva has put pressure on officials to come up with other measures to ease the cost-of-living burden.

Abhisit yesterday said Finance Minister Korn Chatikavanij had proposed the use of coupons to subsidise energy prices for certain user groups, instead of cutting the excise rate on diesel, which stands at more than Bt5 per litre.

The premier said the diesel price had to be managed because it affected the prices of other goods and services.

"We're evaluating whether the rise in oil prices is temporary or whether it is an up-trend. There is a chain reaction when oil goes up, as the cost of living, transport and so on also rise. But we will not do anything that could have a negative long-term structural impact," he said.

Deputy Finance Minister Man Pattanothai said that if the world crude oil price topped US$100 (about Bt3,000) per barrel, it would be necessary to discuss the diesel excise-duty issue again.

Meanwhile, the Energy Ministry might allocate between Bt4 billion and Bt5 billion per year of royalty fees from petroleum sales to subsidise the domestic LPG price if the government continues to peg the price of cooking gas.

Energy Minister Wannarat Charnnukul said this would reduce the burden on the Oil Fund, which had been depleted by recent spikes in oil prices.

Thailand has produced the equivalent of 783,000 barrels per day of petroleum products this year, up from 695,000 last year, with royalties of Bt121.5 billion collected from companies exploring for and producing petroleum in both the Kingdom and the Thailand-Malaysia joint development area (JDA) in the fiscal year that ended in September.

Of the total, Bt42 billion was from domestic exploration and production and Bt9.97 billion from the JDA, while more than Bt1.78 billion was extra revenue.

The current diesel contribution to the Oil Fund is 15 satang per litre. Sales of B3 diesel are subject to excise of Bt5.31 per litre, while B5 diesel attracts Bt5.04.

Wannarat said the ministry had asked PTT and Bangchak Petroleum to maintain the diesel price at not more than Bt30 per litre.

Banluesak Pusarangsri of CIMB Thai Bank said the government was attempting to rein in inflation by preventing the diesel price from rising beyond Bt30.

However, such an attempt is unlikely to be effective in the long run if the global oil price is on an up-trend. In addition, price control measures will lead to a higher state burden, Banleusak said.

Other critics also suggested the move would distort market mechanisms, even though higher diesel prices would hit the cost of living and various sectors of the economy, especially transportation.

-- The Nation 2010-12-14

[SamritT]

Like free bus, free water, free train, free electricity, etc. Govt should also give out free petrol. 10 free ltr per day per person. Give out as a coupon, so we can collect it at any PTT station. That will be nice. Like Myanmar (although not free).

[trogers]

Like free bus, free water, free train, free electricity, etc. Govt should also give out free petrol. 10 free ltr per day per person. Give out as a coupon, so we can collect it at any PTT station. That will be nice. Like Myanmar (although not free).

Basic human behavior - whatever is free has no value.

[asiawatcher]

Yeah let's give out 'coupons' so we can create more paperwork and useless accounting to Govt bodies that have no idea, but if it's on paper - it must be okay!

[ginjag]

Yeah let's give out 'coupons' so we can create more paperwork and useless accounting to Govt bodies that have no idea, but if it's on paper - it must be okay!

For a few years--when oil was 150 D a barrel---my electric bill here in rural Thailand--had a 30 per cent addition---the price on the bill is plain --so much per unit or whatever is used--------------NOW LOOK AT THE SMALL PRINT---it says ---f.t.---what the hell is that----it =if I am mistaken was added when fuel was high--like a surcharge-----------------I HAVE ASKED THE ELECTRIC COMPANY they said they DON,T KNOW what it stands for-----well is there a more clever man than me that can explain it------------if it was a surcharge initially---WHY now isn,t it abolised----HELP from ANYone please.

[RogueExpat]

-NOW LOOK AT THE SMALL PRINT---it says ---f.t.---what the hell is that----it =if I am mistaken was added when fuel was high-HELP from ANYone please.

Farang Tax?

[Ricardo]

-NOW LOOK AT THE SMALL PRINT---it says ---f.t.---what the hell is that----it =if I am mistaken was added when fuel was high-HELP from ANYone please.

Farang Tax?

f.t. = fuel tax, perhaps ?

[SamritT]

FT = Farang Tax. Ha hahaha. How could you think of it. FT is more like For Thailand.