Bangkok:Energy Minister Ekanat Promphan has highlighted the urgent need for tax mechanisms to address the impact of rising oil prices. The government is considering reducing excise taxes on E20 and B20 fuels to support the transportation and agricultural sectors as part of its efforts to maintain economic stability.

According to Thai News Agency, discussions are underway with the Ministry of Finance to explore the potential for excise tax reductions. The government aims to improve the liquidity of the Fuel Fund, which currently faces a deficit of approximately 100 billion baht, without resorting to further borrowing.

Ekanat noted that global oil prices remain volatile due to international conflicts, particularly affecting crude oil and diesel prices over recent months. To manage these increases, the government is utilizing the Fuel Fund and surplus profits from refining margins, which have already resulted in a 4 baht per liter reduction in ex-refinery prices.

The proposed measures include reducing excise taxes on E20 and B20 fuels, which are priced approximately 6 baht per liter lower than E10 and B7 fuels. This reduction aims to lessen the price compensation burden on the Fuel Fund while providing targeted assistance to fuel users.

During the Russo-Ukraine War, the government previously reduced excise taxes on gasoline and diesel, which led to a significant revenue loss. As the Fuel Fund is currently in deficit, the Ministry of Energy is exploring options to increase liquidity without additional borrowing, such as using funds from the Energy Conservation Promotion Fund and dividend income from state-owned oil companies.

The government is prepared to lower domestic fuel prices if global oil prices decline. In the long term, the Ministry of Energy plans to promote biofuels and electric vehicles to reduce reliance on imported fuels and ensure energy security, aiming to maintain competitive energy costs without increasing household burdens.