The Ministry of Energy is mulling additional measures to manage fuel prices, following the Cabinet’s approval of a proposed excise tax reduction on diesel for three months. The decision effectively halves the rate from 5.99 baht to 3 baht per liter to help alleviate the fuel price crisis.
The Federation of Thai Industries (FTI) recently expressed concerns that global oil prices may continue to surge, reaching US$100 a barrel this year. High fuel prices could negatively affect many sectors across the pandemic-battered economy.
The first factor causing soaring fuel prices in Thailand stems from the rapid increase in demand for, and prices of, crude oil and refined oil in the global market.
Thailand’s crude oil imports have increased by 63% on average from 37.2 billion baht per month in 2020 to 60 billion per month in 2021. The monthly average value of refined oil imports also rose by 20% to 2.34 billion baht, according to the Energy Ministry.
Another factor leading to the fuel price hike is the ongoing conflict between Russia and Ukraine. Russia is the world’s second-largest oil producer. The Kremlin may respond to the tensions by reducing oil and gas supplies, said Supant Mongkolsuthree, chairman of the FTI.
The ministry will soon hold a meeting of the subcommittee on fuel fund management to discuss the matter. Officials hope to freeze the price of diesel at 30 baht per liter until the end of May amid rising global fuel costs.
Following the Cabinet’s decision, the ministry will also hold discussions with fuel distributors about replenishing their supplies to meet the public demand.
Authorities are meanwhile urging motorists to be understanding of the current fuel situation while assuring that the government will do its best to alleviate public financial burdens through new policies and regulations.