Thailand: Plug pulled on diesel cap

  • The government has appealed for public understanding over its decision to lift the THB30 per litre diesel price cap in May 22.
  • Gen Prayut said the Fuel Oil Fund which had been pumping in cash to keep the price down is now severely depleted while loans sought to support the fund have also run out.
  • “People should understand the limits of the government’s capacity to help. The increase in the price of diesel will have an adverse impact on people and lead to inflation. Now is the time for everyone to cooperate and the government is ready to take care of people,” PM Prayut said.
  • LTFT chairman Apichart Prairungruang said haulage industry representatives will formally lodge their opposition to the removal of the cap at Government House on 28 Apr 22 and ask the government to come up with measures to ease the plight of those affected.
  • Deputy Prime Minister and Energy Minister Supattanapong Punmeechaow on 27 Apr 22 explained that from 1 May 22, the government will still help subsidise the diesel price, but to a lesser extent.
  • “The retail price of diesel is now at THB40 per litre. If the government subsidises half of the price above THB30 a litre, the new cap will be THB35 per litre.”
  • “The Energy Ministry will monitor the situation to ensure that price rises happen gradually. We will not do an immediate jump to THB35 per litre as people will be in trouble.
  • Mr Supattanapong also urged the private sector to help by reducing production costs rather than raising consumer prices.
  • The cabinet on 29 March 22 approved revoking the subsidy for premium diesel used in luxury cars, effective from Apr 22, in a move to save on budget expenses.
  • The cabinet previously approved lifting the borrowing limit on 15 March 22 for the state Fuel Oil Fund to allow for management flexibility, a move that offers the government more room to cope with surging fuel prices caused by the Russia-Ukraine conflict.
  • As of 17 April 22, the Office of the Fuel Fund reported the state Fuel Oil Fund was THB50bn in the red.

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