Thai Government to Revoke 8 Baht Subsidy for Premium Diesel
Thailand’s government has approved revoking subsidies on premium diesel used in luxury cars starting in April in order to reduce budget expenses.
Deputy government spokesperson Rachada Dhnadirek said the move will also reduce the burden on the State Oil Fund, which currently subsidizes diesel at 8 baht per liter.
The Energy Ministry recently presented a report to the cabinet that revealed the Oil Fund paid average subsidies of 7.25-7.6 billion baht per month in January and February to maintain diesel prices at 30 baht per liter, a price that is still considered relatively high by some.
As a result, the fund had a negative balance of 29,3 billion baht as of March 13.
On March 15, the cabinet lifted the borrowing limit for the state Oil Fund to allow for management flexibility, which gives the government more flexibility to cope with surging fuel prices caused by the Ukraine-Russia conflict.
The domestic diesel consumption is about 65 million liters per day, 1.4 million of which is premium diesel.
Ms. Rachada also reported that the cabinet approved setting aside 199 million baht to subsidize cooking gas to 3.6 million people holding state welfare cards for three months.
The cooking gas subsidy was approved by the cabinet on Tuesday as one of ten measures to help the public cope with the rising prices of goods, services, and energy.
These measures will cost 80.2 billion baht, and they include granting a 100-baht discount to 5,500 vendors and hawkers. Gasohol costs will also be reduced by 250 baht each month for 157,000 motorcycle drivers registered with the Department of Land Transport.
In addition, the Government will help metered taxi drivers under the Lom Hai Jai Diow Gun (Breathe Together) project to buy natural gas for 13.62 baht per kg, as well as those who consume less than 300 units of electricity per month by reducing the fuel tariff by 22 satangs per unit from May to August and preserving the retail price of diesel at 30 baht per liter until the end of April.
The cabinet also agreed to reduce the social security contribution rate for both employers and employees to 1% under Section 33 of the Social Security Act so that employees would have more spending power and employers would have more money to operate their businesses.
Furthermore, the cabinet lowered the rate of social security contributions under Section 39 of the Act from 9% to 1.9%, and under Section 40, it was reduced to a range of 42-180 baht per month.
Cabinet has not yet approved the budgets for the other nine measures.
Moreover, Ms. Rachada noted that the government may be required to support the Oil Fund in case of an emergency in order to create confidence among financial institutions that extend loans to the fund.
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