50 satang reduction in diesel price just not worth it, says LTAT chief
The Energy Ministry should bring the price of diesel down further if it wants to stimulate the economy and tourism, the Land Transport Association of Thailand (LTAT) said.
LTAT chief Apichart Prairungruang said on Wednesday that the ministry’s decision to only reduce the price of diesel by 50 satang per litre will have no effect on the cost of transportation. He explained that the cost of transport rises or drops by 3% for every 1 baht change in diesel price.
Hence, he said, to make more of a difference, the ministry should bring the price down further. Besides, he said, the global price of diesel is likely to drop soon and the price can easily be maintained at 25 baht per litre.
He also advised the ministry to separate the subsidies provided to the Oil Fuel Fund for diesel and liquified petroleum gas to be fair to consumers.
He added that reducing the price of fuel will also stimulate the economy and the tourism sector. Once the price of fuel drops, people will travel more and spend more.
Also, reducing the price of fuel will bring down the cost of electricity, he added.
Apichart also wondered if the new government will be able to deal with the rising prices of fuel and electricity, as many parties have failed in keeping them in check.
The Oil Fuel Fund on Tuesday agreed to reduce the retail price of diesel by 50 satang bringing it down to 32 baht per litre from May 15 onwards.
The fund was 79 billion baht in debt as of Tuesday, 32.50 billion baht of which was the result of subsidies for diesel and 46.74 billion baht for LPG subsidies.
