Abhisit = all the previous thai Prime Ministers : let’s subsidize diesel !

SANTADRUNK

Christmas in August Part 2 (for the first part, read here).

Motorists will again enjoy cheaper diesel by two baht a litre starting next week, after Prime Minister Abhisit Vejjajiva demanded that the state Oil Fund subsidise prices. […]

The result, said an Energy Ministry official who declined to be named, was that the ministry on Monday would seek approval to suspend the Oil Fund levy of 1.70 baht a litre collected on diesel. Approval is needed from the National Energy Policy Council (NEPC), which Mr Abhisit chairs.

An additional subsidy to oil traders of 0.30 baht would bring the pump price down by two baht a litre.

“So all of the money will go to help the Oil Fund to pay part of the price for diesel users as the Oil Fund now has accumulated income of 16.8 billion baht, too little to finance the subsidy,” the official said.

The source added that Mr Korn had resisted cutting the excise tax on fuel.

“He told us that the excise tax can’t be cut because the government’s tax revenue was far lower than the target,” the official said. (Bangkok Post)

This is a show case. A show case of inane economic policy. And a striking example of “political copycat”.

-Abhisit in january decided to scrap the excise tax on diesel… Talk about coherence…

-Abhisit and his buddy Korn, the alleged Finance Minister, prefer a… debt to a lower tax. Pathetic accounting trick…

-people should remember that SOMEONE WILL PAY. There is no free lunch. Never. A subsidy is a fix of “feel good dope”. But YOU WILL PAY.

-Pushing people to consume more diesel is the bottom of economic thinking… When Thailand has already a poor energy efficiency

-and let’s remember that Thaksin did exactly the same absurdity, from 2004 to 2005. The result of this “folie” was a hole of 100 billions THB ! And this is why the Oil Fund was created (a small tax on each liter sold, to pay back the debt).

-same story with Samak (you remember ?) last year… Subsidies for gasoline and diesel. On a large scale. A festival.

-it’s easy to see the short term obsession behind such policy : Abhisit is in full “populist gear mode”, spreading money around. The guy is terrified by his own shadow.

So, like I wrote just after the “election” of Abhisit… Change with Abhisit ? Yes We Can(‘t). πŸ˜‰

UPDATE
I’m wondering if Korn plays stupid on purpose ? … On friday he’s okay to subsidize diesel… and sunday he’s willing to increase taxes on cars to promote “alternative energy”. πŸ˜‰

The Ministry of Finance is eyeing to increase motor vehicle taxes to urge motorists to use alternative energy.

Finance Minister Korn Chatikavanij said on Sunday that he had a meeting with Industry Minister Charnchai Chairungrueng and Energy Minister Wannarat Channukul to discuss the tax structure for the automotive industry and the energy consumption at the moment.

Because of the rising fuel prices, the government wanted motorists to turn to alternative energy, he said. (Bangkok Post)

8 Responses to “Abhisit = all the previous thai Prime Ministers : let’s subsidize diesel !”


  1. 1 Lothar 8 August 2009 at 4:45 pm

    The overall result is still a plus for every liter oil sold.
    It’s just a move what internal budget will go up or down. So it’s a christmas where presents are just moving in a circle.

    The only problem is that nobody here seem to try to optimize the transportation system. My landlord who owns a furniture shop is always going one way empty when he picks up new items from Chiang-Mai.

    The mentality to optimize processes with multiple involved parties is just not a thai thinking – and changing mentality takes at least one or two generations. And many more generations in the case of politicans.

  2. 2 ThaiCrisis 8 August 2009 at 5:54 pm

    Yes. I want to believe in the mega-projects idea. I would like to. Because it would be a real leap forward for the country… The current transportation system is appalling. And costly. And absolutly not prepared for the future.

    The bottom line if I may say is very simple to understand : if oil prices go up at 150 USD again, and keep that level, then the whole thai economy would just collapse.

    Not more, not less. Bye, bye.

    So It’s not a matter of “pollution” (albeit), but rather a matter of survival. We need to revamp the transportation system.

    A whole economy based on cheap (because subsidized) diesel, like Thailand, is nothing but a one way ticket for a grim future.

  3. 3 banphai 8 August 2009 at 7:46 pm

    Abhisit’s customary bad timing is so impeccable. Only a week ago the Chief Economist of the International Energy Agency (IEA) warned the world that we are heading for a catastrophic energy crunch. Most of the major oil fields have now passed peak production, and there is a real risk that any economic recovery will be “strangled” by increasing oil prices. See:
    http://www.independent.co.uk/news/science/warning-oil-supplies-are-running-out-fast-1766585.html

  4. 4 ThaiCrisis 8 August 2009 at 10:28 pm

    Thanks for the info Banphai.

  5. 5 banphai 9 August 2009 at 10:02 pm

    According to a report in The Nation today, “the National Energy Policy Council, chaired by Prime Minister Abhisit Vejjajiva, will meet on Monday August 10 to consider measures to stabilise retail oil prices in light of renewed spikes in global prices”. Is the Government saying that the steady rise in world crude oil prices from US$34 a barrel at the beginning of the year to now around US$70 is a ‘renewed spike’? What exactly is the ‘stable’ price of oil? The report ends with a breath-taking statement: “The government is determined to keep diesel below Bt30 per litre, to reduce the pressure on transportation cost which could lead to an increase in the cost of products and services.”
    http://www.nationmultimedia.com/2009/08/07/business/business_30109362.php

  6. 6 ThaiCrisis 9 August 2009 at 11:56 pm

    Indeed. That’s typically thai : a panic mode, in which several people make contradictory statements (sometimes totally), like headless chicken running amok, through various media, in quick burst.
    πŸ˜‰
    It’s hilarious.

    It shows the harsh reality : nobody is in control. And all those pathetics politicians and bureaucrats think they can have an opinion about each and every issues.

    Korn says something, Abhisit says something, the alleged Energy Minister (ah ah ah) says something, academics, so called “experts”, “journalists”, my dog, cats, germs, viruses…

    It’s not “varity of opinions” and “debates” anymore. It’s just the Great Confusions of Minds, The Grand Inferring Bordello (copyright myself). πŸ˜‰

    Stop the presses.

  7. 7 Mr. & Mrs. Discobbolos 10 August 2009 at 10:48 pm

    AND NOW FOR SOMETHING ENTIRELY DIFFERENT:

    The cub born to giant pandas Chuang Chuang and Lin Hui of the Chiang Mai Zoo has been officially named “Lin Bing” on Monday.
    La la la la la la la la
    La la la la la la la la
    La la la la la la la la
    La la la la la la la la
    (Best song to Kylie Minogue song: Can’t Get You Out Of My Head

    *****************************
    Government of Thailand of three Black Hawk helicopters and associated equipment and logistic support for an estimated cost of $150 million.

    Thailand – UH-60L Black Hawk Helicopters
    http://www.shephard.co.uk/news/3541//
    The Government of Thailand has requested a possible sale of three UH-60L Black Hawk helicopters with six T-700-GE-701D engines with C controls, AN/APX 100 (V) Identification Friend or Foe Mark XII Transponder Set or suitable substitute/commercial equivalent, warranty, internal hoist kits, spare and repair parts, tools and support equipment, publications and technical data, personnel training and training equipment, US Government and contractor engineering and technical support services and other related elements of logistic support.
    La la la la la la la la
    La la la la la la la la
    La la la la la la la la
    La la la la la la la la

    **********************
    Amazing picture of baby elephant stuck down a manhole
    http://www.mirror.co.uk/news/top-stories/2009/08/10/amazing-picture-of-baby-elephant-stuck-down-a-manhole-115875-21587200/
    La la la la la la la la
    La la la la la la la la
    La la la la la la la la
    La la la la la la la la

  8. 8 ThaiCrisis 11 August 2009 at 1:07 am

    “Bien vu”, Bob.
    πŸ˜‰
    Indeed. We should talk more about “the baby panda”.

    Amazing country…

    It’s surreal…


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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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