Govt criticized for pegging diesel prices

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BANGKOK, 20 April 2011 – An academic has criticized the government’s decision to keep subsidizing diesel prices below 30 baht a liter in order to gain political benefits in the upcoming general election. 

Dr Praipol Koomsup, a lecturer at the Faculty of Economics, Thammasat University, deemed the policy a political tool of the government because the new election was approaching. He said the policy would only give short-term benefits.

The academic suggested that the government should gradually increase oil prices rather than pegging them because the global oil price was still on the rise with a very low chance of falling down following the intensifying unrest in the Middle East.

Dr Praipol added that the government and its fuel oil fund would have to shoulder a heavy burden until the end of the fiscal year. He also noted that the next government would also experience problems if the diesel price was pegged until September.