Thailand to keep diesel subsidy in place through April

Thailand will keep the diesel subsidy in place and the price below 30 baht (US$0.99) a liter until April. The decision flies in the face of strong opposition from academics and local energy experts. Finance Minister Korn Chatikavanij said that the Oil Fund still has 35 billion baht (US$1.15 billion) in hand. “Subsidizing the diesel price until the end of April should not cause any problems for the fund,” said Korn. The government did agree to review alternatives to deal with rising diesel prices. According to Korn, “There are other options to support diesel prices, such as reducing the excise tax, but we must be careful because cutting the excise tax by just one baht (US$.04) per liter would affect the government’s revenue by 19 billion baht (US$627 million) per year.” Suwaporn Sirikoon, chief executive director of the Energy for Environmental Foundation, responded to the government decision to keep the diesel subsidy with disappointment. “The government’s persistent attempts to keep the diesel price at 30 baht (US$0.99) per liter are disappointing. Instead it should look for other options such as better management and strategies, especially if the uprisings in North Africa and the Middle East carry on for another few months. The government has never come out to say how it would deal with a possible oil crisis if the unrest is prolonged and intensifies. What the government is worried about is just keeping the price at 30 baht (US$0.99) a liter using the Oil Fund which is using up the Thai people’s money just for the sake of gaining votes.” (March 8, 2011)