The five-baht reduction of the diesel excise tax will relieve pressure on logistics and transport costs after diesel prices exceeded 30 baht a litre starting earlier this month, says the Land Transport Federation of Thailand (LTFT).
The two-month tax cut, which was approved by the cabinet on Tuesday, should also help the government avoid what the Federation of Thai Industries called a “perfect storm” in the economy, referring to the combined effects of a limited diesel price subsidy and the end of the diesel excise tax cut scheduled for May 20.
The government previously agreed to halve the tax, usually levied at 5.99 baht a litre, for a period of three months to cap diesel prices below 30 baht a litre.
With diminishing cash in the Oil Fuel Fund, authorities decided to reduce the subsidy from May 1, causing the diesel price to increase.
Without a renewed tax…
