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Unbelievable Reversal: Thai Government Bows to Pressure – Diesel Excise Tax Cutback Soon Reimplemented!

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In an effort to reestablish the balance in fuel prices, the government plans to re-implement the 5-baht reduction of diesel excise taxes. A decision taken by the previous government saw this deduction exercised for two full years, ending recently. The initiative relies on subsidies from the Oil Fuel Fund to cap the retail price at a threshold of 35 baht per litre.

However, it is crucial that the timing of this measure’s reinstatement aligns with the global oil market situation. This is to avoid imposing an untenable strain on the fund. The goal is to ensure the fuel fund’s capacity to sustain subsidies without being overwhelmed, highlighted a governmental source.

The next step in the plan involves lowering contributions from diesel and benzine retail prices towards the Oil Fuel Fund. By successfully achieving this, a subsequent decrease in these fuels’ retail prices would be witnessed. To implement this effectively, enhanced financial management from the government is required. This will ensure the fund’s ability to fulfil its financial obligations towards its fuel trade partners, including debt and interest repayments.

The final part of the plan is to restructure fuel pricing, with an emphasis on refining costs. These prices have sparked criticisms from numerous groups who assert they’re unjustifiably excessive.

The blueprint for the new price structure is in its formulation phase and is being overseen by the Energy Policy and Planning Office (EPPO). It is expected to take some time for this process to be completed due to its complex nature.

It’s important to note that while the first two measures are expected to yield immediate results, the last strategy will likely require a longer timeframe. This is particularly true considering Thai refineries are bracing for the adoption of the Euro 5 standard in the coming year. The adaptation to this standard will inevitably increase production costs, which adds to the intricacy of price adjustments.

With these forthcoming changes, the government aims to deliver immediate relief in fuel prices while tackling the long-term challenge of creating a more sustainable and balanced fuel economy.

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