The government should offer another temporary excise tax cut of three baht on benzine to ease the financial burden from soaring global oil prices caused by the Russia-Ukraine clash, says a Thammasat University economist.
The Dubai reference price stood at US$98.8 a barrel on Thursday as news of the Russian invasion spread. The price in the Singaporean market also increased by more than $5 per barrel.
The situation is expected to eventually hike retail oil prices in Thailand by one baht, but for diesel the recent excise tax reduction helped to cap the price below 30 baht a litre, said economist Praipol Koomsap, also a former assistant to the energy minister.
"It's time for the government to consider decreasing the excise tax on benzine in order to deal with the immediate impact of the global oil price surge," he said.
Earlier authorities decided to cut the excise tax on diesel by half for three months in a bid to better control diesel prices. Motorists are usually charged diesel excise tax at 5.99 baht a litre.
Excise tax on gasoline and gasohol, a mix of ethanol and benzine, currently stands at 5.2-5.87 baht a litre.
The Prayut Chan-o-cha administration resorted to the excise tax cut after the Oil Fuel Fund, which has been used to subsidise diesel prices, began running low. This caused the Oil Fuel Fund Office (Offo) to seek more money.
The office was granted a 20-billion-baht loan from commercial banks and a 10-billion-baht provisional loan over the next few months to support its subsidy programme.
However, the total loans are near the legal limit of 40 billion baht under the Offo Act.
Mr Praipol said a benzine excise tax cut is appropriate during the Russia-Ukraine crisis as the measure will be implemented for a short time.
"Experts believe the clash will not be protracted, lasting only six months, so expensive energy prices will not last long," he said.
