Democrat Urges Government to Cut Fuel Tax, Not Just Refinery Prices
A Democrat Party spokesman criticizes the government's fuel subsidy approach, arguing that cutting excise tax would deliver real price relief instead of temporary fund-based adjustments that leave pump prices unchanged when global oil price
On September 20, 2024, Trairat Sirizhantaropass, energy economics spokesman for the Democrat Party, criticized the Fuel Fund Management Committee's decision to reduce diesel prices at refineries by 4 baht per litre, calling it merely "squeezing refinery profits" after allowing them to remain inflated for too long. Although the measure should have been taken, he said it came too late and falls short of significantly lowering pump prices, as the fuel price structure carries other burdens the government refuses to address, particularly excise tax at nearly 7 baht per litre.
Using fuel fund money to support prices is merely "moving money from one pocket to another," Trairat argued, because when global oil prices drop, the state must reduce subsidies and return money to the fund, preventing pump prices from falling as the public expects. He cited a clear example: on September 16, the fund announced a diesel subsidy increase to 8.62 baht per litre, but just three days later, crude oil prices fell 2 percent. The public hoped to see fuel prices drop, but on the night of September 18, the fund reduced its subsidy by 1.67 baht to 6.95 baht per litre, leaving pump prices unchanged despite the global market decline.
"This is the same vicious cycle that never truly solves the problem," Trairat said. "When oil goes up, the fund subsidizes; when it goes down, money goes back into the fund. The public never fully benefits from falling global oil prices. The party therefore reiterates its original proposal: the government can immediately cut excise tax on fuel to deliver real, lasting price reductions, not temporary cuts through the fund that consumers ultimately pay for anyway."
Trairat questioned why the government, with 50 billion baht still remaining in the Thai Help Thai Plus programme, does not use those funds to cut fuel prices nationwide, providing immediate relief and addressing root causes better than occasional borrowing schemes. He challenged whether the government fears losing popularity. If the government adopted the Democrat Party's proposal to reduce excise tax on diesel for two months at 7 baht per litre, it would cost less than half the budget needed to extend Thai Help Thai Plus, while genuinely reducing the cost of living and production costs for businesses across the country, he concluded.
