The Cabinet has approved a 20 billion baht funding from the emergency loan to help cap the retail price of diesel oil at 30 baht per liter. The Prime Minister has asked truck operators not to stage more protests, explaining the need for substantial funding to help subsidize oil prices each month.
At the mobile Cabinet meeting today in Krabi, members of the Cabinet approved a 20 billion baht funding to the Oil Fuel Fund, which will be used to keep the retail price of diesel oil at 30 baht per liter or less.
This amount of funding approved by the Cabinet is intended to cover a period of 4 months, after which the situation should return to normal, provided the global oil prices decrease.
The Cabinet has also ordered the Ministry of Transport to help increase logistics capacity using trains and long-distance buses, with military vehicles to be deployed if needed.
In a plea for truck operators not to stage more protests, Prime Minister Gen Prayut Chan-o-cha explained that the pricing subsidy of diesel will cost 3 billion baht per month, while the balance of the Oil Fuel Fund is in the red.
Mr. Thanawat Polvichai, President of the University of the Thai Chamber of Commerce and Chief Advisor to the university’s Center for Economic and Business Forecasting, said the 30 baht per liter cap is the appropriate level that has always been implemented over the past 10 years.
He said around 1.5 billion baht of funding is needed each month for each baht of the subsidized amount beyond the cap, with the current measure expected to cost some 20 billion baht at the end of this year.
Despite the costs, Mr. Thanawat said the capping measure can be extended further to the first quarter next year, as the economy would still require assistance from the government while waiting for recovery.
He also suggested the government could implement this measure as targeted campaigns for certain groups, in the form of coupons, tax rebates, or compensation.
Regarding the demands of truck operators, Mr. Thanawat said he believes the operators would not want the general public to be affected, but rather wish to negotiate with the government.
He said truck operators are unlikely to entirely suspend their services, as doing so would affect the logistics sector. (NNT)