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183744
Mon, 05/23/2011 - 07:57
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https://oananews.org//node/183744
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THAILAND OPTS FOR TAX INSTRUMENT TO COMBAT OIL PRICES
By JAMALUDDIN MUHAMMAD
BANGKOK (Bernama) – Against a backdrop of rising world fuel and food prices, Thailand has opted for tax instrument to cap its diesel price following the depletion of its State Oil Fund in providing subsidies.
Thailand cut excise tax and value-added tax (VAT) on diesel from 5.70 Baht/litre (about 57 sen/litre) to 0.005 Baht/litre effective last month.
The global fuel and food prices began to rise since middle of December last year and early January respectively, amid political tensions in North Africa and Middle East, and the shortage in production and supply of food.
Energy Minister Warnarat Charnweerakul had said the government made the decision to continue the diesel pump price cap at below 30 Baht a litre on April 21, well ahead of the July 3, general election.
He said the government was concerned with the impact of the diesel price hike on inflation, consumer goods, transportation costs and overall country's economy.
The new measure is to replace temporarily the existing mechanism in
providing subsidy to diesel consumers through the 34-billion Baht (about RM3.4 billion) State Oil Fund as the fund almost broke its bund as at the end of last month.
Diesel subsidy costs the fund 300 million Baht (about RM30 million) a day.
The new measure would cost the country 45 billion Baht (about RM4.5 billion) in revenue but it would not affect this year's budget and fiscal conduct, according to the Finance Ministry.
Out of 5.70 Baht of the excise tax and VAT, 0.40 Baht is for VAT currently.
"The new solution would not unduly affect the country's monetary policy and the people's standard of living," said Prime Minister Abhisit Vejjajiva.
According to the Bank of Thailand's latest economic review released on April 28, the country's economy was likely to grow 4.1 per cent this year, with consumer prices to rise by 3.9 per cent.
The central bank expects inflation risks to outweigh those on economic growth with the forecast for the average Dubai oil price to increase to US$108 (RM324), from US$91 (RM273) per barrel.
However, the oil price fluctuated in recent weeks and recorded US$121 (RM373) per barrel last week.
Director of Macroeconomic Policy of the central bank, Songtum Pinto had said that the Thai economy was unlikely to be seriously affected as rising oil prices were offset by robust export growth.
Commerce Minister Porntiva Nakasai said Thai exports for the first four months of this year hit 2.2 trillion Baht, an increase of 17.7 per cent, with trade surplus of 57 billion Baht (RM5.7 billion).
However, Songtum cautioned that the country could lose its competitiveness due to relatively high transport and logistic costs and low efficiency in energy use.
Thailand currently consumes about 900,000 barrels of oil per day with its net imports of oil reaching 6 per cent of General Domestics Products (GDP), higher than its competitor countries in the region.
The Thai economy needs 1.3 barrels of oil to produce US$1,000 (RM3,000) of GDP compared with 0.6 barrel in China, 0.9 barrel in Indonesia, 1 barrel in Malaysia and 1.1 barrels in Vietnam, according to a local bank TMB analysis.
The pump prices per litre of petrol in Bangkok and nearby provinces
fluctuate depending on the market ranging from 35.54 Baht to 42.94 Baht while the price of diesel remained at 29.22 Baht per litre at state owned outlets.
Hike in fuel and food prices have a great impact on people from all walks of life, especially the middle and lower income group, and how they translate this into votes will be known on July 3.
Even a giant company like Thai Airways International did not escape the heat as its first quarter net profits plunged 94 per cent as it was hit hard by spiking fuel prices and foreign-exchange losses.
According to the national carrier, its net earnings for the January-March period was 618.46 million Baht compared with 10.57 billion Baht in the corresponding period of last year.
Jet fuel prices in the first quarter was 33.5 per cent higher than in the same period last year.
BANGKOK (Bernama) – Against a backdrop of rising world fuel and food prices, Thailand has opted for tax instrument to cap its diesel price following the depletion of its State Oil Fund in providing subsidies.
Thailand cut excise tax and value-added tax (VAT) on diesel from 5.70 Baht/litre (about 57 sen/litre) to 0.005 Baht/litre effective last month.
The global fuel and food prices began to rise since middle of December last year and early January respectively, amid political tensions in North Africa and Middle East, and the shortage in production and supply of food.
Energy Minister Warnarat Charnweerakul had said the government made the decision to continue the diesel pump price cap at below 30 Baht a litre on April 21, well ahead of the July 3, general election.
He said the government was concerned with the impact of the diesel price hike on inflation, consumer goods, transportation costs and overall country's economy.
The new measure is to replace temporarily the existing mechanism in
providing subsidy to diesel consumers through the 34-billion Baht (about RM3.4 billion) State Oil Fund as the fund almost broke its bund as at the end of last month.
Diesel subsidy costs the fund 300 million Baht (about RM30 million) a day.
The new measure would cost the country 45 billion Baht (about RM4.5 billion) in revenue but it would not affect this year's budget and fiscal conduct, according to the Finance Ministry.
Out of 5.70 Baht of the excise tax and VAT, 0.40 Baht is for VAT currently.
"The new solution would not unduly affect the country's monetary policy and the people's standard of living," said Prime Minister Abhisit Vejjajiva.
According to the Bank of Thailand's latest economic review released on April 28, the country's economy was likely to grow 4.1 per cent this year, with consumer prices to rise by 3.9 per cent.
The central bank expects inflation risks to outweigh those on economic growth with the forecast for the average Dubai oil price to increase to US$108 (RM324), from US$91 (RM273) per barrel.
However, the oil price fluctuated in recent weeks and recorded US$121 (RM373) per barrel last week.
Director of Macroeconomic Policy of the central bank, Songtum Pinto had said that the Thai economy was unlikely to be seriously affected as rising oil prices were offset by robust export growth.
Commerce Minister Porntiva Nakasai said Thai exports for the first four months of this year hit 2.2 trillion Baht, an increase of 17.7 per cent, with trade surplus of 57 billion Baht (RM5.7 billion).
However, Songtum cautioned that the country could lose its competitiveness due to relatively high transport and logistic costs and low efficiency in energy use.
Thailand currently consumes about 900,000 barrels of oil per day with its net imports of oil reaching 6 per cent of General Domestics Products (GDP), higher than its competitor countries in the region.
The Thai economy needs 1.3 barrels of oil to produce US$1,000 (RM3,000) of GDP compared with 0.6 barrel in China, 0.9 barrel in Indonesia, 1 barrel in Malaysia and 1.1 barrels in Vietnam, according to a local bank TMB analysis.
The pump prices per litre of petrol in Bangkok and nearby provinces
fluctuate depending on the market ranging from 35.54 Baht to 42.94 Baht while the price of diesel remained at 29.22 Baht per litre at state owned outlets.
Hike in fuel and food prices have a great impact on people from all walks of life, especially the middle and lower income group, and how they translate this into votes will be known on July 3.
Even a giant company like Thai Airways International did not escape the heat as its first quarter net profits plunged 94 per cent as it was hit hard by spiking fuel prices and foreign-exchange losses.
According to the national carrier, its net earnings for the January-March period was 618.46 million Baht compared with 10.57 billion Baht in the corresponding period of last year.
Jet fuel prices in the first quarter was 33.5 per cent higher than in the same period last year.
