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Thailand: Product prices not likely to be raised for now after Cabinet okays diesel tax cut
The business sector is expected to postpone product price hikes for three months after the Cabinet approved a move to reduce the excise tax for diesel fuel by 3 baht per litre for three months, Thai Chamber of Commerce vice president Wisit Limleucha said on Wednesday.
ACabinet meeting on Tuesday approved a proposal by the Finance and Energy ministries to seek a 3-baht reduction in diesel tax from the current 5.99 baht per litre, which is based on oil consumption of about 2 billion litres per month. The date from which this reduction will take effect has yet to be announced.
The tax cut came amid protests by truckers and transport operators against the high diesel price. The protesters wanted the excise tax to be cut from 5.99 baht to 0.10 baht per litre for a year.
“The diesel fuel cost is responsible for 10-15 per cent of product transport costs,” Wisit pointed out.
“A reduction in the diesel tax will put the brakes on the continually rising fuel price since the start of the year and help manufacturers in accurately estimating production costs in the next three months. This will also eliminate the need to raise the price of many products until the measure ends.”
Wisit said many businesses had been shouldering rising costs for several months now and did not raise prices because they realised that people had lower purchasing power amid a recessive economy.
“Many businesses, especially SMEs, have had to temporarily suspend operations due to a lack of capital,” he said. “So the reduction in diesel tax by 3 baht per litre will greatly help bring down the transport cost as well as energy costs for businesses that use the fuel in electricity generation,” Wisit said.
“We estimate that the move could help many businesses postpone a hike in product prices for three months or until a better measure is announced,” he added.
Published : February 17, 2022
By : THE NATION