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). 😉
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”. 😉
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)