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ECONOMY
YUTHANA PRAIWAN
Local energy experts warn that the latest government measures to help ease the financial burdens of low-income people could end up spoiling consumers, who will expect subsidies to continue.
Anusorn Sangnimnuan, the president of Bangchak Petroleum Plc, said the government should remind people regularly that the special measures will only last for six months.
The measures announced on Tuesday include free bus rides, reduced electricity and water bills, and, most significantly, fuel tax cuts that will reduce pump prices by three to four baht a litre from Aug 1.
''It doesn't mean I disagree with the idea,'' Dr Anusorn said. ''It's good to see the government help fight poverty, but it should frequently remind consumers that the subsidy programme is only for a short period.
''I just want to caution the government about the consequences as [Thai people] will be looking for other help instead of trying to survive by themselves.''
Speaking at a seminar on oil prices, he noted that global oil prices tended to peak in December and January on high world demand. If prices are high next Jan 31, when the subsidies are due to expire, the governmnet might be tempted to prolong the handouts, he said.
''At that time if there is a new election, as some political analysts are forecasting, it would be highly possible to see the programme extended out of fear of a drop in popularity among voters.''
Prasert Bunsumpun the chief executive and president of PTT Plc, agreed with the government's initiatives but said six months definitely had to be the limit. Otherwise, he said, the government could end up repeating history. He pointed to the decade-long subsidy for liquefied petroleum gas, which no government has shown the political courage to end.
PTT says that subsidising LPG has cost it 100 billion baht so far.
He also said that the government could use the next six months productively by seriously promoting alternative fuels to ensure a smooth transition in the event that oil prices hit $200 a barrel.
''At $200 per barrel, the bubble in global oil would burst as the world economy cannot withstand the impact on costs,'' he said.
Mr Prasert said that other Asian countries had been reducing or scrapping fuel subsidies because the cost to taxpayers was too high. They included China, Malaysia, Bangladesh and Vietnam, where oil demand has since dropped sharply as a result.
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