Bangkok:Thailand's oil pricing structure is under strain, with further reductions posing potential impacts on the public, warns Associate Professor Dr. Wanwichit Boonproong of Rangsit University. He advises against reliance on Singapore prices, taxes, and the oil fund, emphasizing the need for Thailand to explore compensatory measures unless the Value Added Tax (VAT) is increased by 10%.

According to Thai News Agency, Dr. Wanwichit analyzed that the government has already implemented numerous measures to reduce fuel costs, but further price cuts are constrained by fiscal limitations. He cautions against abolishing excise tax or the fuel fund, as these are critical for the government's ability to manage an energy crisis. A suggested increase in VAT from 7% to 10% could offset lost revenue but would lead to higher living costs for the public.

Dr. Wanwichit also highlighted the complexity of lowering fuel prices, noting that Thailand's dependency on crude oil imports ties energy prices to the global market. While the proposal to eliminate the Singapore refinery price reference is frequently suggested, it poses challenges and does not guarantee immediate price reductions.

The government has undertaken steps such as adjusting the refinery pricing formula, reducing excise taxes on select fuels, and utilizing the Fuel Fund to stabilize prices. Recent efforts have included restructuring oil prices by removing certain hypothetical expenses from the refinery price calculation, and temporarily reducing excise tax on B20 diesel and E20 gasoline.

Dr. Wanwichit emphasized the importance of balancing short-term public assistance with long-term fiscal stability, warning that significant revenue loss from reduced fuel taxes would necessitate finding alternative revenue sources. He called for a comprehensive consideration of energy policy, focusing not only on retail prices but also on ensuring energy security and maintaining government revenue.

Ultimately, Dr. Wanwichit urged for clear proposals on fuel price reductions that detail the components to be reduced, compensation amounts, reduction duration, and management of the impact on national revenue. The societal impact of such measures, particularly on low-income groups, must be carefully assessed to ensure net benefits to the public.