Former Finance Minister writes an article, is it time to quit the oil fund? pointing to rising oil prices not just temporary
On October 21, Mr. Teerachai Phuwanatnaranubarn Former Minister of Finance Post a message to offer an opinion on “It’s time to stop the oil fund?”
I do not agree with the idea of the government of Gen. Prayut to give the oil fund a loan of 20 billion baht to freeze the diesel price of 30 baht and see that it’s time to stop the oil fund. for the following reasons
1. The price of oil is not temporarily rising.
One of the reasons the world price is rising because different countries returned to normal after the vaccine (reopening), so there was more travel There is more industrial and agricultural production. Therefore, oil consumption will continue to rise. not temporary
another reason The trend in energy investment over the years has shifted away from fossil fuels. to focus mainly on renewable energy The development of oil production is less than it should be. And a number of shale oil producers in the United States are temporarily suspending production because lockdowns have led to high cost losses. It will take time to negotiate with creditors to revive production.
Therefore, higher world oil prices So it’s not a temporary event. but still tends to be higher Many analysts expected it to break through $100 a barrel. The government has to freeze diesel prices for a long time. and when the world oil price remains at a high level The Thai government will not be able to easily raise the rate of payments to the oil fund to pay back 20 billion debt.
This concept, therefore, is to borrow debts. just to subsidize fuel consumption. without seeing an opportunity to repay the debt
except if the price of oil tends to fall It will be because the world economy has slowed down. Either from the US government must end the stimulus by handing out money. which weakens the purchasing power of the people which in the event that the Thai economy has slowed down as well Thai people who use oil will not be ready to increase the rate paid to the oil fund.
Therefore, instead of fixing the price of oil The government should lay the groundwork for transport operators. Transfer that higher cost to the factory. retailer wholesaler to gradually adjust prices for consumers It encourages to initiate a plan to manage each family’s spending. to prepare for the real conditions of the world market Instead of closing the door for Thai people to act the same which before adjusting, when it’s late
2. The problem was caused by the government of Gen. Prayut wrongly managing the cooking gas.
Many years ago during low oil prices. The government collects a large amount of money to pay into the fund each month. instead of collecting so that if you want to freeze the price Today the government will have enough money in the drawer ready. will not have to borrow But the government is back to creating the burden of taking money from the oil fund. to subsidize the price of cooking gas
Reasons to withdraw money from the Oil Fund to subsidize the price of cooking gas caused by the government of General Prayut wrongly managing the cooking gas
by canceling the ceiling that controls the price of cooking gas used by households which the previous government had held the ceiling for a long time With the previous government that the amount of cooking gas used by households It is a gas produced from the Gulf of Thailand. should be given the benefit to the household As for the petrochemical sector that has to compete in purchasing cooking gas as raw materials, It should be the party that bears the burden of the world market price.
But the government of General Prayut returned to lift the ceiling. Change the price of cooking gas for households to refer to the world market price. Both the gas produced from the Gulf of Thailand.
during the rising world market price households are suffering but vice versa This policy, in turn, made the companies that monopolize the gas business profited substantially.
when realizing that households must suffer Instead of the government of General Prayut to revise the policy back to original find a temporary solution by taking money from the Oil Fund to subsidize the price of cooking gas
As a result, oil funds don’t have much money left in their hands. despite forcing people to pay into the fund all along Instead, he had to borrow 20 billion baht due to General Prayut’s mismanagement.
3. The use of oil funds to help with energy from plants opens up leaks.
In the past, the government subsidized energy from plants to mix with oil. Both gasohol and biodiesel by paying subsidies from the oil fund Therefore, it is claimed that Reasons to have a fund just for this
But this process is at risk of opening up leaks. because the fund does not directly pay subsidies to farmers but paid to the refinery, so there is no process to ensure There is no restriction on the sources where refineries will buy energy crops, whether they are limited to their own groups or not. It was not publicly disclosed whether the purchase price was fair to the oil fund.
So it’s time to consider canceling the oil fund. and use other mechanisms that support energy crop farmers in a more targeted way
4. The state should set a ceiling for refining and marketing costs.
A spokesman for the Ministry of Energy explained that The domestic oil market is now freely competitive. It is therefore appropriate to compare with the price of imported oil from Singapore. Because if refineries in Thailand make too much profit There will be other people importing oil from Singapore to compete.
But in fact, PTT Group used to have shares in various refineries. By controlling the domestic refining capacity of up to 60%, such a business structure cannot be called free competition. And can’t hope that the refineries in the country will compete with each other seriously.
In addition, the oil refining business is likely to have profits beyond the international norm. As can be seen High profit margins are likely to be the main factor driving the private sector to expand refining capacity. Until it used to exceed the demand of the domestic market by about 1 in 5, for this reason, refineries used to export refined oil to neighboring countries. at a lower price than sold to Thai people
Therefore, as long as the business structure still has some companies holding a high share. which has not actually caused free competition The government should use a method to set a ceiling on refining costs and marketing margins. to a reasonable profit rate not too high to achieve a balance between the refineries retailer wholesaler and consumer people
5. The state should be careful about incurring debt.
The government now has a lot of debt. And next, when interest enters the cycle, tends to rise The interest burden that the state has to pay each year is already heavy. and because the state budget deficit It will have to borrow more just to stand still.
In addition, the government of Gen. Prayut emphasized the policy to spend most of the loan for consumer use. which helps build popular votes in the next election But it does not help increase income for people. Therefore, it cannot help increase tax revenue in the future.
So it’s time for the government to be wary of incurring debt. and should abandon the idea of creating hidden debt through oil funds because if finally unable to collect money to pay the debt The debt of the fund will be a burden to the people of the whole country.