The Thai government is contemplating the extension of the reduction in excise tax on diesel, which is scheduled to end on July 20. Prime Minister Prayut Chan-o-cha has instructed the Finance Ministry and relevant agencies to assess the possibility of prolonging the tax cut.
Energy Minister Supattanapong Punmeechaow disclosed that the Finance Ministry has been assigned the task of evaluating the suitability of an extension. This decision will be based on a study that needs to be submitted to the Election Commission in accordance with the law.
Finance Minister Arkhom Termpittayapaisith confirmed that the ministry is in talks with the Energy Ministry to jointly support the tax reduction. In the event that continuing the tax cut is not feasible, some advisors suggest utilizing the Oil Fuel Fund mechanism through efficient management to regulate diesel prices.
Last year in February, the government implemented measures to reduce the excise tax on diesel in order to alleviate the cost of living. The Finance Ministry reported that the seven previous reductions in diesel fuel excise taxes had a significant impact on state revenue, resulting in a loss of up to 158 billion baht.
In May, Arkhom refrained from taking a stance on whether the diesel excise tax cut should be extended, citing its dependency on global oil prices. The intended outcome of the measure is to lower prices for consumers, particularly in terms of fuel and transportation costs. However, various factors including global oil prices and the state’s Oil Fuel Fund need to be taken into consideration.
Arkhom mentioned that the financial status of the Oil Fuel Fund has improved due to the decrease in global crude oil prices, which aligns with the ministry’s excise tax reduction. Nonetheless, if global oil prices continue to decline, the ministry may have to reconsider its position regarding the extension of the tax cut, as reported by the Bangkok Post.
The financial status of the Oil Fuel Fund has seen a significant improvement as a result of global oil prices. Previously, the fund had a deficit of over 120 billion baht due to the diesel price subsidy program, but now its losses have reduced to around 70 billion baht.
