Thread: Oil excise tax cut 'not needed yet'

http://www.bangkokpost.com/news/loca...t-anytime-soon

Oil excise tax cut 'not needed yet'

• Published: 15/12/2010 at 04:41 PM
• Online news: Local News

The Excise Department does not see any need to cut the tax on oil to rein in the price of diesel at this time, director-general Pongpanu Svatarundra said on Wednesday.

“The diesel price increase will be short-lived and reducing the oil excise tax to curb rising fuel prices is not yet necessary,” Mr Pongpanu said.

He said it is normal for the price to increase in the northern winter, but the Oil Fund is capable of handling it.

The director-general predicted oil prices would drop at the end of winter, probably around March. If not, then tax measures could be implemented.

Prime Minister Abhisit Vejjajiva said the government wants to keep the diesel price at below 30 baht per litre, and therefore it has to review the structure of both the Oil Fund and the fuel excise tax.

He said the Oil Fund is now considered to be in balance and the government would not allow its financial position to fall into negative fiigures by as much as 100 billion baht, as happened in the past.

Mr Abhisit said he and Finance Minister Korn Chatikavanij will discuss a suitable rate of excise tax on oil that would help rein in the price of diesel.

Finance Minister Korn Chatikavanij said the Energy Ministry still has other instruments it can use to manage fuel prices, and they had been effective in the past.

Mr Korn said the Oil Fund currently has 28 billion baht.

"Global oil prices have increased because winter has arrived quicker than usual, causing oil consumption to increase.

"But the strong baht is preventing domestic oil prices from rising further," he said.

He said Thailand has to depend on oil imports and it would not be able to stop the price from rising.

"The government needs to improve the logistics system by developing the railway system to reduce transportation costs and it will have to speed up negotiations with China on the Bangkok-Nong Khai high-speed train project," the minister said.

Mr Abhisit, Mr Korn and Energy Minister Wannarat Channukul were to meet this evening to discuss how best to deal with the oil price situation.