First bill of the 6 months gasoline subsidy : 3 billions THB for oil traders

After the tax cuts on diesel and gasohol (started july 25), the government has to pay a “compensation for inventories” for the retailers. It was supposed to be… 600 millions THB (read here).

And, that’s probably the thai magic, 2 weeks later… the bill… is now 3 billions THB.

It’s a little avant-gout, an appetizer if I may say, of the total cost of the foolish “6 months tax cuts”…

There is no free lunch. The thai people will pay eventually the bill.

The Energy Ministry will pay oil traders and distributors about three billion baht within 90 days after the remaining oil supply in its stock was inspected, according to Energy Policy and Planning Office (EPPO) Director Veerapol Jirapraditkul.

He said the inspection was carried out prior to the government’s fuel subsidy on July 24.

He said the three-billion-baht payment would not affect the Oil Fund’s stability, as its revenue has increased after it discontinued shoring the diesel price by 0.40 baht a litre. He said the Oil Fund’s monthly revenue has increased from just 52 million baht to 484 million baht.

Mr Veerapol added that the government’s six-month fuel subsidy has prompted people to use more oil to some extent because they have to bear the high cost of living. (Bangkok Post)

We have to excuse the reporters for the nonsensical logic of the last sentence. What prompted the people to use more oil is indeed… the subsidy. Lower prices lead to higher consumption. It’s Economy 101.

Now the question is : what will happen in… 6 months ? To this date, no one seems to care about it, or to think about it. It’s absolutely mai sanook ! 😉

So until then, let’s enjoy the tax cuts…

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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