Cabinet approves new energy subsidies
The cabinet has endorsed initiatives aimed at easing people’s energy expenses, covering caps on diesel and cooking gas prices, as well as subsidies for electricity bills for vulnerable groups.
According to deputy government spokeswoman Rudklao Intawong Suwankiri, upon the cabinet’s approval, diesel prices will be capped at 33 baht per litre, effective from April 20 to July 31, requiring a budget of 6 billion baht.
Retail liquefied petroleum gas (LPG) prices will be fixed at 423 baht per 15-kilogramme cylinder, effective from April 1 to June 30, requiring a budget of 500 million baht, she said.
The government plans to provide a discount of 19.05 satang per unit of electricity to residential electricity users consuming no more than 300 units per month, from May to August, requiring a budget of 1.8 billion baht.
According to Mrs Rudklao, the prime minister ordered the utilisation of funds from the state Oil Fuel Fund, and if insufficient, funding will be allocated from the government’s central budget reserves for emergency or necessary expenditures.
Budget Bureau director Chalermphol Pensoot said the subsidy for electricity costs for vulnerable groups will be funded by the government’s annual central budget, while the diesel and LPG measures will be supported by the Oil Fuel Fund.
According to the Energy Business Department, Thailand’s fuel consumption dropped by 2.6% year-on-year to 157 million litres per day (MLD) in the first quarter, partly resulting from the end of the state fuel price subsidy programmes.
From January to March, demand for jet fuel and LPG increased, but the usage of gasoline, gasohol, diesel, compressed natural gas and fuel oil fell.
Consumption of gasoline and gasohol, a mix of gasoline and ethanol, decreased by 0.2% to 31.7 MLD.
Demand for diesel decreased by 6.9% to 71.1 MLD, down from 76.4 MLD in the first quarter of last year when power companies used diesel for power generation as a substitute for expensive liquefied natural gas imports.
Domestic diesel prices are likely to keep increasing, following the end of the diesel price subsidy via the Oil Fuel Fund on March 31, and the excise tax cut of one baht a litre expiring on April 19.