Diesel price in Thailand to be pegged at current level for two more months

[misskit]

The Thai cabinet has decided to subsidise the diesel price until January 20th, which means a loss of excise tax revenue for the state of another 20 billion baht.


After the cabinet meeting today (Tuesday), Prime Minister Prayut Chan-o-cha told the media that the cabinet decided to maintain the diesel price by prolonging the 5-baht/litre excise tax cut on diesel.


He admitted that the continuation of subsidies on diesel fuel will mean more spending and a need to borrow more. He said that he understands this will place a greater burden on the next government adding, however, that the subsidies are necessary, as he assured that the government will try its best to manage its debt.


Finance Minister Arkhom Termpittayapaisith, meanwhile, said that the state will lose about 20 billion baht on diesel subsidies for the additional two months and that, although global diesel prices have dropped, the actual domestic price has not.


He said that the Finance Ministry will have to guarantee new loans for the Oil Fuel Fund, so it will be able to subsidise oil and gas prices adding, however, that he can’t tell for sure when the subsidies will end and the ministry is closely monitoring the oil price situation.


The cabinet also approved 81 billion baht for a rice price guarantee scheme for the 2022-2023 crops. About 66 billion baht will come from the Bank of Agriculture and Agricultural Cooperatives and the rest from the Rice Department’s budget.

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[Norton]

Diesel price in Thailand to be pegged at current level for two more months

Another bad decision which will have far greater negative economic implications than the amount of inflation increase which would result if diesel price increased.

[ootai]

Another bad decision which will have far greater negative economic implications than the amount of inflation increase which would result if diesel price increased.

Norton I am not an economist so can't really argue the impact re the impact on the total economy but if the diesel price went up then we would not be harvesting rice for people.
If I remember correctly back when the current "boss" took over the government he dictated that the price charged for harvesting could not exceed B600/rai and that was 6 years ago.
I just asked the missus what she is charging today and it is B650/rai hardly in line with cost increases is it.
Aside from diesel being the major cost a couple of days ago we needed a new track roller and that cost B1800 so we then have to harvest 3 rai just to pay for that.
I asked the missus what happens if they don't pay and she said then they don't get their rice cut next year and word travels around about them reneging.

So I think I rise in the price of diesel would have an effect way beyond the purely economic one.
I suppose if it reduced the number of pickups getting around that would be a benefit.

[Norton]

You are absolutely right re the impact on farmers and this is why the gov is taking this move to continue the price freeze. However, the very large national debt increase ro do so will further weaken the baht which will increase the cost of all Thai imports which are done in foriegn currency.

Not an expert either bro but will helping the farmers offset the harm to companies who rely on imports?

Time will tell.