Bangkok (VNA) – Thailand has abandoned attempts to cap domestic fuel prices, which have been driven up by the Middle East conflict, and will instead offer targeted assistance to the sectors hardest hit by high prices.
The government will allow domestic energy prices to move in line with market forces, Thai Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas told a television news programme on March 25, adding that price suppression had led to market distortions, hoarding, and unnecessary budget losses.
On March 2, the Thai government announced price caps on the most widely used transport fuels, saying it would not allow diesel prices to exceed 33 THB (1.01 USD) per litre. As a result, the state Oil Fuel Fund spent 20 billion THB over three weeks to subsidise fuel prices, at a rate of about 1 billion THB per day. However, subsidies continued to rise, reaching 27 THB per litre for diesel and 9.70 THB for petrol, costing the fund about 2.5 billion THB per day.
After scrapping the fuel price cap, state assistance will be directed to the poor, as well as drivers, farmers, fishermen, contractors, and operators in sectors directly affected by the energy crisis. Those earning less than 100,000 THB per year will receive monthly subsidies.
Approximately 13.4 million Thais fall into this group, and the Ministry of Finance is studying appropriate subsidy levels, Ekniti said.
In the public transport and logistics sectors, about 360,000 truck drivers and 30,000 public transport drivers will receive fuel subsidies. The assistance will also cover drivers of passenger vans, taxis, and motorcycle taxis.
The Thai Ministry of Commerce is preparing to offer lower-priced fertiliser to help farmers. About half of the country’s fertiliser supplies come from the Middle East and shipments have been disrupted by the closure of the Strait of Hormuz.
Meanwhile, the Ministry of Transport will provide fishermen with B20 diesel (diesel containing 20% palm oil), which is 5 THB per litre cheaper than conventional diesel. Contractors undertaking public sector projects will also receive compensation to offset rising construction material and fuel costs, ensuring project progress.
In addition, businesses in the industrial and service sectors will be offered preferential loans to support liquidity./.
