Thailand's special Cabinet approves 7-step oil crisis relief
A special Cabinet meeting approved seven measures, including possible excise tax cuts and aid for welfare recipients, transport, farmers, fisheries and SMEs.
- The government will review a possible reduction in excise tax rates on oil to alleviate costs.
- Vulnerable groups will receive a temporary THB100 increase to their monthly state welfare card allowance.
- Targeted support will be provided to sectors heavily impacted by fuel prices, including transport, agriculture (low-cost fertilizer), and fishing (cheaper B20 fuel).
- Businesses will receive assistance through relief for government contractors and THB10 billion in soft loans for SMEs.
Lavaron Sangsnit, Permanent Secretary for Finance, said the special Cabinet meeting on March 25, chaired by Prime Minister Anutin Charnvirakul and Finance Minister, had approved in principle the proposal put forward by the Finance Ministry.
He said these were necessary measures that needed to be implemented urgently and would deliver the greatest benefit to the public.
The seven measures are as follows:
- The Finance Ministry will review a possible reduction in excise tax rates, including how much they should be cut and for how long, as appropriate. The ministry will work out the details and discuss them with the Election Commission of Thailand.
- Measures to support vulnerable groups will use the state welfare card mechanism, with THB1.3 billion from the central budget. Approval was also given today to top up state welfare card holders. Normally, the monthly allowance for consumer goods is THB300 per person. During this period, it will be increased by THB100 to THB400 per person. As the government is in a caretaker capacity, the measure will initially apply for only one month. Once a full government is in place, the situation will be assessed closely before a decision is made on whether to extend the measure. This measure will also have to be submitted to the Election Commission of Thailand.
- Measures will be introduced to help groups affected by rising oil prices, namely the transport sector, including truck operators, bus operators and motorcycle taxi riders.
- Assistance will also be provided to the agricultural sector. At the outset, the government believes the fastest impact on farmers will be fertiliser costs. It will therefore look at the Green Flag project and support for low-cost fertiliser. Details will be worked out to help reduce costs, alongside support for the use of alternative or organic fertiliser to reduce reliance on imports.
- Fishermen will also receive support through access to B20 fuel, which is expected to cost about THB5-THB6 less per litre than regular fuel. This is expected to help the fishing sector.
- Support will also be provided to contractors with the state. During a period when industrial operators or related businesses face disruptions because they do not have enough fuel to run machinery, project delivery may be delayed. The government will therefore extend work inspection and acceptance periods. If delays are prolonged, penalties may apply, but the government will consider how relief can be granted. Another measure that would help ease the burden on contractors is to speed up payment of contract price-adjustment compensation, known in Thailand as K-factor compensation.
- Measures will also be introduced to help SMEs. Government Savings Bank has prepared THB10 billion in soft loans to strengthen liquidity for operators, especially small businesses across the supply chain. Further details will be announced later by the bank.
