If Thailand lowers the diesel excise tax by 5 baht per litre to peg the retail diesel price at 25 baht per litre, this will cost the state coffers up to 150 billion baht, said a Finance Ministry source, who requested anonymity.
Earlier, the Land Transport Federation of Thailand (LTFT) proposed to the ministry to cut the diesel excise tax by 5 baht per litre as a means to cap the diesel price at 25 baht per litre against the current price of 30 baht.
The source said the ministry will incur losses of 150 billion baht in oil excise revenue if it accepts the federation's request. He added that it is also difficult to seek revenue from other sources to offset the losses.
The Excise Department expects to collect revenue of 597 billion baht in fiscal 2022, of which 225 billion baht is expected to be revenue from oil excise and oil products.
The government is expecting net revenue of 2.4 trillion baht in fiscal 2022.
The source added that if the ministry cuts the diesel excise tax now, the government will have fewer fiscal tools to cap the diesel price in the future if the global oil price rises further.
The Oil Fund, currently valued at around 7 billion baht, is used to subsidise the retail diesel price at 2 baht per litre, which has brought down the diesel price to the current 30 baht per litre.
The Oil Fuel Fund Office proposed the government borrow 20 billion baht to be reserve funds for the Oil Fund, which would be required in the case that the fund needs to spend over 7 billion baht to cap the diesel price.
