Thailand to cut excise tax on oil

Govt in bid to keep diesel below Bt30 per litre
By WICHIT CHAITRONG,
WATCHARAPONG THONGRUNG
THE NATION
Published on June 25, 2010


The government might cut oil taxes to keep the retail price of diesel at Bt30 per litre or lower, to prevent a negative impact on the cost of living, Deputy Finance Minister Man Pattanothai said yesterday.



He noted that under the policy to hold the Bt30 threshold, the government might cut excise tax or local government tax, or reduce contribution to the Oil Fund, in order to reduce the price by at least Bt2 per litre.

Currently diesel price is Bt28.89 per litre.

"The National Energy Policy Council will convene this month to discuss oil prices and the cost of living," he said.

Meanwhile, the Energy Ministry will propose to the National Energy Policy Council to maintain the Liquefied Petroleum Gas and Natural Gas for Vehicles (NGV gas) prices for six months, until February next year. They expect this will increase the amount of subsidy from the Oil Fund by another Bt6 billion.

Energy Minister Wannarat Charnnukul said at the council's meeting yesterday that the LPG and NGV prices, which are now fixed at Bt18.13 per kilogram and Bt8.5 per kilogram respectively, would continue until February next year. The government measure, aimed at giving relief to the people's cost of living, was due to expire in August.

"Though the economy is recovering, it is not yet back to normal. To help people relieve their cost of living burden, we decided to peg the retail prices of LPG and NGV for six months," he said.

He said that continuing to fix LPG and NGV prices would not have much of an effect on the Oil Fund, which now has a net cash flow of Bt20 billion and has cash inflow every month. The subsidy for fixing the prices is expected to cost around Bt6 billion.

For the fuel tariff (FT) rate that is correlative to electricity prices, which will also stop fixing the price in August, he said the ministry has assigned the Energy Regulatory Commission to gather information for the council to consider whether the practice of fixing the rate should continue.