Thai business groups push diesel tax cuts as energy crisis intensifies

Thailand’s business sector has called on the government to ease the impact of rising energy costs, with transport and industry groups urging measures to stabilise diesel prices and reduce taxes.

The Land Transport Federation of Thailand has demanded that the government cap diesel prices at 30 baht per litre for at least one month to ease cost pressures. It also proposed suspending diesel excise tax collection for three months during the crisis.

The Federation further suggested that, if price increases are unavoidable, they should be implemented gradually to avoid severe impacts on the economy and cost of living.

Meanwhile, the Federation of Thai Industries (FTI) has called on the government to help manage business costs by maintaining stable energy prices, particularly diesel, which is a key factor in transport and production expenses.

Government steps up response to energy crisis

The prolonged conflict in the Middle East, now entering its second week, has prompted the government to intensify efforts to manage the energy crisis.

On March 17, 2026, Prime Minister Anutin Charnvirakul convened economic agencies at Government House to address rising energy prices, following the expiry of a 15-day diesel price cap at no more than 30 baht per litre.

Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas said legal measures were under discussion but confirmed that no borrowing could be undertaken at this stage, as the caretaker government cannot issue an emergency decree to guarantee loans for the Oil Fuel Fund.

Commerce Minister Suphajee Suthumpun said the ministry would introduce measures to control rising goods prices linked to higher fuel costs, with further details to be proposed to the Cabinet.

Emergency measures to boost fuel supply

Earlier in the day, Energy Minister Auttapol Rerkpiboon and Energy Ministry Permanent Secretary Prasert Sinsukprasert held urgent talks with oil traders and refinery representatives to assess the situation and address delays in fuel distribution.

Authorities agreed on urgent measures to accelerate fuel deliveries to service stations, including increasing tanker truck capacity, boosting delivery frequency, and speeding up distribution from depots.

The Energy Ministry expressed confidence that these steps would help replenish fuel supplies and restore normal conditions soon, urging the public not to panic and to remain confident in the country’s energy stability.

Oil fund strain and gradual price adjustments

At a separate meeting with the economic team, the government acknowledged that the Oil Fuel Fund is currently in deficit by 12.605 billion baht, following diesel subsidies since March 4.

Officials indicated that diesel prices would be adjusted gradually, in increments of 0.50 to 1 baht per litre, rather than sharply, to minimise the impact on living costs.

Plans to allow the Finance Ministry to guarantee loans for the Oil Fuel Fund are being prepared legally, but final decisions will rest with the incoming fully empowered Cabinet.

 

Economic risks under different war scenarios

The government reviewed several economic scenarios linked to the Middle East conflict:

• If the war ends within one month without regional escalation, the impact on Thailand would be limited, with GDP growth remaining near 2%.
• If the conflict lasts three months, global crude prices could stay above $100 per barrel, pushing up inflation in March–April and weighing more heavily on the economy.
• In a worst-case scenario involving wider regional or global escalation, oil prices would surge further, causing severe economic disruption.

Even if the conflict ends quickly, oil prices are expected to remain elevated for several months due to increased global demand as countries replenish strategic reserves.

Concerns over damaged energy infrastructure

The conflict has already caused significant damage to oil and gas infrastructure in the Middle East, which may disrupt production for some time.

The government has instructed the Energy Ministry to reduce reliance on Middle Eastern oil imports and source supplies from other regions through PTT Public Company Limited. Refineries have also been told to operate at full capacity to ensure sufficient domestic supply.

Authorities are also working with the private sector to speed up fuel transport and address pricing imbalances between industrial fuel sales and retail pump prices.

Transport sector threatens protest action

Thongyoo Khongkhan, president of the Land Transport Federation, said the group had repeatedly called on the government to act but had yet to receive a response.

The Federation plans to stage a “Truck Power” demonstration at Laem Chabang Port on March 18, 2026, with more than 250 trucks expected to participate, to press its demands and highlight the sector’s challenges.

In addition to price controls, the group has called for a temporary suspension of refined oil exports to ensure adequate domestic reserves and boost confidence during a prolonged crisis.

Industry urges balanced energy pricing

Nava Chantanasurakon, vice chairman of the Federation of Thai Industries, said stable energy prices are crucial to easing pressure on businesses, as transport costs are a major component of production and trade.

“The industrial sector wants to see energy price management that achieves an appropriate balance between supporting business costs and maintaining overall economic stability,” he said.

He warned that if diesel prices rise sharply, transport costs would increase immediately and be passed on to consumers through higher prices for goods and services.

The industry also expressed concern over projections that diesel prices could reach 40 baht per litre, describing this as a worrying level that could have widespread impacts on production, logistics, and household living costs.

However, the sector supports the government’s approach of avoiding sudden price hikes and instead implementing gradual adjustments to prevent economic shocks.