BANGKOK, 1 July 2014 – The Excise Department remains confident that the diesel excise tax will be increased by 1 to 3 baht as the National Council for Peace and Order (NCPO) has made it clear that it will not cling to the populist policy like the previous government.
Somchai Poonsawad, Director General of the Excise Department, quoted the NCPO policy to leave domestic oil prices to fluctuate according to the market forces. He also said that since the NCPO would streamline the energy sector’s infrastructure and refrain from using populist policies, the diesel excise tax would no longer stay in the same rate as it had been for more than three years.
According to Mr. Somchai, the previous government’s long-term subsidy to diesel prices had led to an unrealistic domestic market mechanism. Diesel prices are currently at least 7 baht per liter cheaper than benzene oil prices.
The Excise Department Director-General also said that a rise of 1 baht per unit in diesel excise tax would yield an increase of 20,000 baht in revenue to the government. Mr. Somchai expressed his support to the diesel tax hike, saying the money could be used to fund a few major infrastructure projects under the administration of the NCPO.