November 3, 2007
THAILAND : Energy
Thailand to cut oil levy
Thailand will cut the levy oil traders pay into a state fund to pay off previous subsidies to persuade them delay retail prices as global crude oil prices soar, Energy Minister Piyasvasti Amaranand said on Friday.
The levy, which ranges up to 4.0 baht per litre, would be cut by 0.40 baht ($0.118) per litre for all fuels following another spike of global oil rises, Piyasvasti told reporters.
"If we reduce the state oil fund money, it'll make oil traders slow their decision to rise oil prices," he said.
Diesel prices at Bangkok pumps were raised by 0.40 baht a litre to 28.14 baht per litre on Wednesday as the price of Asian diesel reached a record $108.18 a barrel.
Piyasvasti has said the government had no plan to restore fuel subsidises which cost the treasury $2.7 billion in the 19 months from January 2004 to July 2005.
The levy reduction, however, would delay slightly repayment of the debts incurred by the oil fund, which the government had hoped to clear the middle of December, he said.
"The oil tax cut is going to reduce fund income by 800 million baht a month, meaning the remaining 5.5 billion baht debt payment is going to be late" December, he said.
U.S. crude steadied at over $93 a barrel on Friday as concerns about tight supplies heading into the northern hemisphere winter arrested a sharp overnight decline.
U.S. light crude for December delivery was at $93.97 a barrel by 0957 GMT.
Prices have quadrupled since 2002 on worries about real and potential supply disruptions, growing global demand and refining constraints.
Analysts say the chance of $100 a barrel oil is plausible. ($1=33.99 Baht)