Ministry of Energy Announces Reduction in Diesel Price to Ease Energy Costs
Tomorrow, diesel price to be reduced by 2 baht/litre
In a welcome development for consumers, the Ministry of Energy has announced that starting from tomorrow, the retail price of diesel will be reduced by 2 baht per litre. This decision comes after the Cabinet’s resolution to lower the excise tax to 2.50 baht per litre and employ the Oil Fund management mechanism to stabilize prices until the year-end.
Effective from 20 September 2023, the purchase of diesel will now cost no more than 30 baht per litre, down from the previous ceiling of 32 baht per litre. The Ministry of Energy, with an aim to alleviate the burden of energy costs on citizens, recommended the use of the excise tax mechanism and the fuel control fund to ensure diesel prices remain at an affordable level.
The Cabinet’s meeting on 13 September 2023 yielded an official resolution, approving a reduction of 2.50 baht per litre in diesel excise tax, applicable for a duration of three months, spanning from 20 September to 31 December 2023. This measure is expected to play a vital role in keeping the price of oil well below 30 baht per litre.
An official from the Ministry of Energy revealed that the current excise tax on diesel stands at 5.99 baht per litre. With the Cabinet’s decision to reduce it by 2.50 baht, the new tax rate will be set at 3.67 baht per litre. The remaining funds will be allocated to make the 2 baht per litre price reduction feasible, while 0.32 baht per litre will be utilized for managing and enhancing the liquidity of the Fuel Reserve.
Presently, the Oil Fund is subsidizing diesel prices by 8.98 baht per litre, which marks the highest subsidy rate in history. This substantial subsidy is necessary due to the continuous escalation in global diesel prices. Consequently, as of 17 September 2023, the Oil Reserve finds itself in a negative position of 61,641 million baht, comprised of a negative oil account of 16,902 million baht and a negative liquefied petroleum gas (LPG) account of 44,739 million baht.
An official source admitted, “Recognizing the surge in global diesel prices, we have calculated that if the average world diesel price hovers around 126-130 USD per barrel, there should be sufficient funds to address this issue within the loan framework that involves public debt to the Oil Fund. Subsequently, we will have approximately 110 billion baht remaining, with around 50 billion baht allocated to ensure diesel remains at 30 baht per litre and to uphold the Cabinet’s decision to freeze LPG prices until the end of the year.”
The Ministry of Energy announces good news Tomorrow, diesel will be reduced by 2 baht/litre, down to 30 baht/litre from the original 32 baht/litre, following the Cabinet’s decision to reduce the excise tax to 2.50 baht /litre and use the Oil Fund management mechanism to hold the price until the end of the year. Ready to use the remaining loan of about 50 billion baht.
A news report from the Ministry of Energy informs that tomorrow (20 September 2023) the retail price of diesel will be reduced by 2 baht / liter from the current no more than 32 baht / liter to no more than 30 baht / liter ago Cabinet decision (Cabinet) On 13 September, in order to reduce the burden of energy costs on the people, the Ministry of Energy proposed to use the excise tax mechanism and the fuel control fund to hold the price of diesel fuel at no more than 30 baht per litre. from 20 September 2023. Until 31 December 2023
In this regard, the Cabinet meeting on September 13, 2023 passed a resolution approving a reduction in the diesel excise tax of 2.50 baht per liter for 3 months, starting from September 20 – December 31, 2023, which will be one mechanism to help to reduce the price of oil to no more than 30 baht per litre.
A source from the Ministry of Energy said that the excise tax on diesel is currently 5.99 baht/litre. If there is a reduction according to the Cabinet’s decision of 2.50 baht, it will be left at 3.67 baht per litre, which will leave money remaining. It was then said that approximately 2.32 baht was used to reduce the retail price of diesel to the public at a rate of 2 baht/litre and the remaining 0.32 baht/litre was used for management to improve the liquidity of the Fuel Reserve a little
Currently (as of 19 September) the Oil Fund has subsidized the price of diesel by 8.98 per litre. baht, which is considered the highest subsidy rate in history because the price of diesel in the world market has continuously increased. And this makes the position of the Oil Reserve on September 17, 2023, negative at 61,641 million baht, divided into a negative oil account of 16,902 million baht and a liquefied petroleum gas or LPG account of negative 44,739 million baht.
“Accepting that the price of diesel in the global market has increased, we have estimated that if the average world diesel price is 126-130 USD/barrel, there will probably be enough money to take care of it under the loan framework that includes the public. debt to the Oil Fund Then there is 110 billion baht left, about 50 billion baht, to maintain diesel at 30 baht / liter and freeze LPG according to the decision of the Cabinet until the end of the year,” the source said.
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