Analysts refuse to cut oil excise tax

Analysts refuse to cut oil excise tax

Various steps needed to ease the burden

An attendant holds a fuel nozzle at a gas station. Global oil prices are expected to rise, following escalating tensions between oil-rich Russia and Ukraine.

Energy policymakers need to implement various measures, including a reduction in the excise tax on petroleum, to make fuel prices bearable for businesses and households, according to energy analysts.

Global oil prices are expected to soar, especially following ongoing tensions between oil-rich Russia and Ukraine. The dispute shows no sign of easing through political means as the United States chose to send troops to Poland, Germany and Romania amid growing concern over a Russian invasion of Ukraine, according to the media.

Poland and Romania border Ukraine, which has Russian troops amassed across the border with its neighbor.

Disputes between oil-rich countries in other regions are also of concern.

Praipol Koomsap, an economist at Thammasat University and a former assistant to the energy minister, said if these disputes got out of hand it would affect global oil supply and push prices up to $100 a barrel.

The Thai government has capped diesel prices at less than 30 baht per liter using the Petroleum Fund via a price subsidy.

The fund’s balance sheet is currently in the red with a loss of 14 billion baht.

The Petroleum Fund office has previously applied for a loan from commercial banks, but by law it is not allowed to acquire more than 20 billion baht.

The authorities may eventually have to resort to reducing the excise tax on gasohol – a mixture of gasoline and ethanol – and diesel to 2 baht per liter, against almost 6 baht per liter currently.

The excise tax on unleaded gasoline and liquefied petroleum gas (LPG), which is used as cooking gas, is 6.5 baht per liter and 2.17 baht per kilogram, respectively.

“State assistance should also cover gasohol users, primarily personal car drivers, not just truck, bus and van drivers who rely on diesel,” Praipol said.

He endorsed the Department of Energy’s latest measure to reduce the proportion of palm oil-derived methyl ester in diesel from 7% to 5% to mitigate the impact on running costs. of expensive methyl ester.

Rosana Tositrakul, a former senator from Bangkok, favors a reduction in excise duties as it would help reduce people’s financial burden.

People continue to contribute to the Petroleum Fund through oil purchases even after global oil prices have fallen, so a reduction in levies would help them meet the cost of living more easily, a- she declared.

“Tax collection should be fair to everyone,” Rosana said.

“The tax is only 0.2 baht per liter on jet fuel, which is much lower than diesel and LPG.”

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