Thai economy: Oil retail price cut, diesel up

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ECONOMY
Oil retail price cut, diesel up
Watcharapong Thongrung
The Nation

Electricity and LPG rates maintained; move part of policy to reflect actual cost

BANGKOK: -- The National Council for Peace and Order has decided to cut retail oil prices under the oil-price restructuring plan while maintaining electricity prices.

The price of liquefied petroleum gas and natural gas for vehicles also remain the same.

The decision to initiate the oil-price restructuring was made prior to the formation of the new government.

The Energy Policy Administration Committee chaired by NCPO deputy head Air Chief Marshal Prajin Juntong yesterday approved the oil-price restructure, in line with the junta's policy of adjusting the price of oil and gas to reflect actual cost.

The approval means there will be an adjustment to the contribution to the Oil Fund and the oil excise, which will result in the fall of the gasoline and gasohol retail price.

Chavalit Pichalai, director-general of the Energy Policy and Planning Office, said that new contribution rates for the Oil Fund, excise taxes and municipality tax were reviewed at the Energy Policy Administration Committee meeting. The new rates take effect today.

Gasoline's excise tax has been cut from Bt7 per litre to Bt5.60, while the municipality tax on gasoline has been reduced from Bt0.70 per litre to Bt0.56.

Gasoline's contribution to the Oil Fund has been reduced from Bt11.85 per litre to Bt9.75. After the new rates, gasoline price has been slashed by Bt3.89 per litre from Bt48.75 to Bt44.86.

Excise tax for diesel rises from Bt0.005 per litre to Bt0.75, while the municipality tax increases from Bt0.0005. Its contribution to the Oil Fund has been cut from Bt1.55 per litre to Bt1.

The new diesel price is up slightly from Bt29.85 per litre to Bt29.99, and is still less than the state ceiling of Bt30 per litre.

After the restructuring, the Oil Fund will earn Bt1.109 billion less per month, dropping from Bt3.557 billion to Bt2.448 billion. The Oil Fund is expected to return to positive territory in about three months.

Chavalit said the committee did not consider LPG and NGV prices, and a review would be conducted at the appropriate time.

Department of Energy Business director-general Witoon Kulcharoenwirat said that following the adjustment of the excise tax, municipal tax and oil fund contribution rates, the department had to inspect the oil inventories of retail operators from midnight to 6am this morning.

This is so the department can calculate how much compensation has to be paid to the operators within the next 90 days, Witoon said.

The government has to pay the compensation as operators had purchased gasoline and gasohol at existing excise rates but have to reduce retail prices to conform with the lower excise rates, he said.

Witoon said the compensation figure would not be high as it would be compensation for only gasoline and gasohol and the government would gain more excise from the hike of the diesel excise.

Energy Regulatory Commission member Viraphol Jirapraditkul said the commission decided to set the fuel tariff (Ft) rate for September to December at 69 satang per unit, the figure for May to August, instead of the 71.66 satang per unit it had calculated, so consumers were not burdened.

The Electricity Generating Authority of Thailand is responsible for covering the difference between Ft rate for May to August and the Ft rate for September to December - 2.66 satang per unit. The total cost will be Bt1.426 billion.

A source at the Excise Department said the reduction of the gasoline excise tax and the increase of the diesel excise tax would not impact on the country's revenue from oil excise but would result in revenue increasing Bt5 billion per year.

This will be the result of diesel consumption being higher than petrol consumption, the source said.

The country has daily diesel consumption of between 50 million to 60 million litres. Daily petrol consumption is 20 million litres.

Despite the hike in diesel excise tax, the source said this would not result in the retail diesel price exceeding Bt30 per litre, the threshold the government has maintained in order to avoid bringing a higher burden to public and business sectors.

Fiscal Policy Office deputy director-general Ekniti Nitithanprapas said the fuel price cut would not help boost the economic recovery that much but would ease living cost.

Source: http://www.nationmultimedia.com/business/Oil-retail-price-cut-diesel-up-30242016.html


-- The Nation 2014-08-29

[DinoSabanovic]

How much will be E20?

[tracker1]

Maybe ease the cost of living if you use petrol but with diesel going up commodities will rise so will it really ease the cost of living ? I think not

[catweazle]

And the crowds went wild !

[webfact]

Oil price cut helps boost economy
By Digital Content



BANGKOK, Aug 29 -- The oil price cut effective today, will help spur Thailand's national economy due to increased public purchasing power, bankers and senior business managers said.

Kesara Manchusree, president of the Stock Exchange of Thailand, said that Thursday’s decision by the National Council for Peace and Order (NCPO) to reduce fuel prices would assist the national economy as every sector would see energy costs declined and this would in the end boost the country’s competitiveness.

Bank of Thailand spokesman Chirathep Senivongs Na Ayudhya said the decline in gasoline retail prices would slightly affect inflation but not core inflation and does not pose much significance to the economy because it is necessary commodity.

The cut in retail fuel prices would, however, boost the public's purchasing power.

Smith Banomyong, president of SCB Asset Management, voiced agreement, saying that the NCPO oil price cut would be positive as it would lower operational costs of all production n the country.

Motorists in several provinces are seen lining in long queue to fill up oil tanks of their cars since early this morning, especially those using gasoline and gasohol.

Those using diesel did not do so because diesel price rose slightly, but still below Bt30 per litre as NCPO wanted to help the transportation sector.

Yesterday the NCPO cut gasoline and gasohol prices in an attempt to lower the cost of living and to reflect the real retail prices of fuel. (MCOT online news)


-- TNA 2014-08-29

[Chris Lawrence]

"After the restructuring, the Oil Fund will earn Bt1.109 billion less per month, dropping from Bt3.557 billion to Bt2.448 billion. The Oil Fund is expected to return to positive territory in about three months."

So they will loose over 13 billion baht a year? If you cut rates how can it become + in a few months?

How much did the rice fund loose?

The market controls the fuel prices, not Thailand?

"This is so the department can calculate how much compensation has to be paid to the operators within the next 90 days, Witoon said."

And they have to pay out compensation?

The junta needs to collect taxes not give the money away?

[Ned]

Those using 95 get almsot 4baht/litre off. That's what I put in my Merc and my wife puts in her BMW. That gives us just that little bit extra to stash in our Hong Kong bank account. These are the sort of policies which are really going to encourage good people like us to spend and boost the tragically slowing economy.

[belg]

tax tax tax tax tax tax tax tax tax tax tax tax

thailand is getting more expensive and start to sound like western countries, but without social welfare and modern infrastructure , pension, CIVIL rights for all legal inhabitants