Thailand: Energy subsidies extended
The cabinet on Tuesday approved extensions of both the diesel tax cut for two more months and the electricity bill subsidy until December, in an attempt to mitigate the impact of high energy prices.
According to government spokesman Anucha Burapachaisri, the extension of the measures is necessary to help people suffering from rising costs of living and higher prices of goods and services.
Upon the cabinet’s approval, the excise tax cut of 5 baht per litre for retail diesel prices will be extended for two months from Sept 21 to Nov 20, 2022. The excise reduction, which initially started with a three-baht cut in February, was scheduled to end on Sept 20.
Mr Anucha said the cabinet also approved an extension of the elimination of excise tax on diesel and bunker oil used to generate electricity. The tax-free measure to lower power bills, under the auspices of the Electricity Generating Authority of Thailand, will now continue for another six months from Sept 16, 2022, to March 15, 2023.
The move is expected to cost the government about 20 billion baht in revenue, Mr Anucha said.
The government has already spent over 200 billion baht on subsidy programmes to curb soaring prices of diesel and liquefied petroleum gas, which is used as cooking gas, as well as compressed natural gas and electricity.
The cost of the subsidies does not include the loss of state revenue as a result of the diesel excise tax cut policy.
In a related development, Mr Anucha said the cabinet also approved a 300-million-baht cooking gas subsidy, which will be implemented between October and December this year.
According to Energy Minister Supattanapong Punmeechaow, the cabinet also approved assistance measures for people affected by the fuel tariff (Ft) hike by reducing electricity bills for two vulnerable groups: those using 300 units of electricity per month or less, and those using between 301 and 500 units per month.
The first group will receive a discount of 92.04 satang on the increased Ft per unit of electricity used from this month until December, while the second group will get a discount of between 15% and 75% on the higher Ft over the same period.
Last month the Energy Regulatory Commission approved a hike in electricity bills between September and December, with the power tariff soaring to a record high of 4.72 baht per unit, from 4 baht per unit.
The two targeted groups of consumers account for about 89% of all household electricity users nationwide.
The electricity bill subsidy is estimated to cost about 9.13 billion baht in lost government revenue.
“The cabinet’s latest electricity bill subsidy will help alleviate the impact, particularly of low-income households who use electricity within a specified limit, ” Mr Supattanapong said. “Once the measures end, we have to evaluate what we can do next because energy prices, especially natural gas, remain on a rising trend.”
He noted that the most important thing to do now is to save energy, saying that if Thai people cut their consumption by 10-20%, it would help reduce electricity bills and benefit the entire country.