Thai Govt Cautious on Diesel Subsidy Proposal, Citing Incomplete Coverage

The Thai government has expressed caution regarding a proposal to allocate approximately 50 billion baht from the "Thai Choo Thai Plus" economic stimulus package to subsidize diesel prices. A government spokesperson stated that the proposal needs to consider the impact on all segments of the population, not just diesel users. Ms. Lalida Perthwiwattana, Deputy Government Spokesperson, commented on the proposal by Mr. Trirat Sirichantaroppas, economic advisor for energy for the Democrat Party, to use the remaining funds from the "Thai Choo Thai Plus" project, estimated at around 50 billion baht, to help reduce diesel prices by 7 baht per liter for two months, in conjunction with a reduction in excise tax. She stated that while the proposal can be considered, it must comprehensively address the budget's objectives, the beneficiaries, and the fiscal burden, rather than focusing solely on diesel consumers. Ms. Lalida clarified that "Thai Choo Thai Plus" is not a diesel price subsidy fund but a set of measures approved by the Cabinet on May 19, 2024, with a total budget not exceeding 175.71866 billion baht, under a loan framework of 200 billion baht. Its primary goals are to assist low-income earners and state welfare cardholders, alleviate the burden of living costs, maintain people's purchasing power, and channel income to small retailers. Under these measures, approximately 13.18 million state welfare cardholders receive an additional 700 baht per month, bringing their total to 1,000 baht per month from June to September 2024. The "60/40" co-payment scheme covers food, beverages, designated goods and services, and public transportation, ensuring benefits reach citizens without private vehicles. "We must ask comprehensively: if the money intended to help with the cost of living is used to reduce diesel prices, what will those without cars gain? How will the elderly, low-income individuals, or public transport users directly benefit? A reduction in diesel prices directly benefits based on the amount of fuel used; those who refuel more receive a larger discount, while those who do not refuel receive no direct discount," the Deputy Government Spokesperson said. Ms. Lalida acknowledged that fuel prices affect transportation costs and product prices, and energy measures can benefit the economic system. However, she emphasized the need to consider how much of the reduced cost would be passed on to consumers compared to direct financial assistance or co-payment schemes, which deliver aid directly to recipients. She reiterated that the estimated remaining funds of around 50 billion baht mentioned in the proposal require a clear accounting status check to determine if it is an unallocated loan framework, an approved but un-disbursed amount, a committed liability, or genuinely remaining funds whose purpose can be changed. Each scenario has different legal statuses and procedures. "The figure that appears 'remaining' does not mean it is a lump sum of 50 billion baht that the government can immediately use for any purpose. We need to know where that money is, whether it has existing obligations, and how the law permits a change in its objective. If this sum is to be proposed for reallocation, it should be supported by complete accounting data and a legal basis," Ms. Lalida stated. The government is ready to listen to proposals for reducing energy price burdens from all parties. However, policy design must consider all groups of people, including car owners, public transport users, the elderly, low-income individuals, small retailers, and those without private vehicles. It must also balance the cost-effectiveness of public funds and the impact on fiscal health. "Reducing diesel prices may be one option, but it should not start with the assumption that because 50 billion baht is left, it can be immediately reallocated. Crucially, cost-of-living policies must not be designed with only car owners in mind, because people without cars also have living costs, and the government has a duty to care for them as well," she concluded. Information Source: INN News