Bangkok: Chaturon Chaisang, a Pheu Thai Party MP, has raised alarms regarding an impending oil crisis that could have widespread impacts on the Thai economy. During a House of Representatives meeting chaired by Speaker Sophon Saram, Chaturon urged the government to conduct a thorough investigation into its oil management strategies, highlighting potential corruption links that could exacerbate the situation.
According to Thai News Agency, Chaturon presented an urgent oral motion, urging the House to address the crisis stemming from the Middle East conflict and its repercussions on Thailand. He noted discrepancies in fuel availability claims, citing instances of empty gas stations and a 20 baht per liter price difference at various locations. He emphasized the necessity of investigating the fuel distribution, management, and oversight processes to prevent corruption, profiteering, and personal gain. The issue, he argued, is compounded by a subsidy from the Oil Fund and a significant price difference, raising concerns about fuel reserves being held back for profit as prices increase.
Chaturon highlighted the inconsistency between government assurances of sufficient fuel and the public's inability to find fuel at gas stations. He urged the government to reassure the public about fuel availability and prevent panic-induced hoarding or speculation. The crisis, he warned, is not limited to fuel prices but poses a systemic threat to the economy, impacting sectors like energy, transportation, raw materials, and consumer purchasing power. Recent IMF data showed a more than 50% increase in oil and gas prices, surpassing $100 per barrel, threatening the global economy with stagflation.
Moreover, persisting high oil prices could lead to cost-push inflation in Thailand, affecting transportation, manufacturing, agriculture, and everyday goods. The National Economic and Social Development Council (NESDC) estimates that each 1 baht per liter increase in diesel prices could reduce Thailand's GDP by approximately 0.02%. Prolonged crises could further strain the economy, especially during key periods like the tourist season or Songkran festival.
Chaturon also pointed out that while an excise tax reduction could temporarily ease burdens, it is insufficient to counter the crisis's systemic effects and would cause significant government revenue losses. With public debt nearing the threshold of 70% of GDP, relying solely on subsidies or tax cuts is unsustainable.
The government, having decided against freezing fuel prices, must now transparently inform the public about the crisis's scope, who will receive aid first, and the budgetary and contingency plans for the next 3 to 6 months. Without clear communication, leaving price determination to market mechanisms could unfairly burden the public.
Chaturon proposed prioritizing the resolution of oil distribution issues through transparency in stock and distribution data, investigating hoarding and speculation, and providing targeted aid to vulnerable groups like farmers and small business owners. He also suggested diversifying oil and LNG import sources and expanding public transportation to reduce travel costs.
In the long run, Chaturon advocated for transforming the crisis into an opportunity to build a resilient economic base in Thailand. This would involve enhancing energy security, diversifying import sources, improving reserves and infrastructure, reducing dependence on oil, and strengthening key sectors to better withstand global shocks.