More subsidies coming as oil crisis hits poor

More subsidies coming as oil crisis hits poor

Welfare cardholders also set to get aid

An employee at a PTT petrol station refuels a car as fuel prices soar. (Photo: Varuth Hirunyatheb)
An employee at a PTT petrol station refuels a car as fuel prices soar. (Photo: Varuth Hirunyatheb)

The government plans to roll out measures including additional subsidies on liquefied petroleum gas (LPG) and natural gas for vehicles (NGV) to help alleviate the impact of soaring energy prices on low-income earners.

Prime Minister Prayut Chan-o-cha on Wednesday ordered responsible agencies, including the Energy and Finance ministries, to map out new measures to ease the hardship caused by surging oil prices.

"The Ukraine-Russia conflict is likely to be prolonged for at least another three months," he said.

"The government needs to prepare many measures to handle the impact."

According to Gen Prayut, energy price subsidies may not be enough as the government needs to implement other measures because the inflation rate is likely to increase further, driven by a sharp rise in global energy prices.

"The government may need to offer more subsidies to specific groups of LPG and NGV users, on top of existing subsidies offered to maintain the retail prices of diesel at 30 baht per litre," he said.

According to the Energy Ministry's report to the cabinet on Tuesday, the state Oil Fund paid an average of 7.25-7.6 billion baht per month in subsidies to maintain the retail price of diesel at 30 baht per litre from January to February, which is considered relatively high.

As a result, the fund is 29.3 billion baht in the red as of March 13.

A source from Government House who requested anonymity said the government may make an additional monthly payment of 100 baht per person for three months to welfare cardholders.

LPG prices are now fixed at 318 baht per 15-kilogramme gas cylinder as part of the government's energy subsidy programmes, which are scheduled to finish by the end of this month.

Domestic retail LPG prices are expected to sharply increase to 333 baht per 15kg gas cylinder from early April once the subsidy scheme expires.

The source said the government also plans to offer subsidies on LPG costs to small food and beverage shops that participate in the government's "Khon La Khrueng" co-payment subsidy scheme.

Other measures are expected to include government subsidies on electricity bills and benzine for motorcycles.

The source said the government will also ask for cooperation from NGV traders to help maintain NGV prices during the energy crisis.

In a related development, Gen Prayut on Wednesday ordered the Labour Ministry to seek measures to reduce the impact on employers and employees affected by higher energy prices.

The Commerce Ministry, Agriculture and Cooperatives Ministry, and the National Economic and Social Development Council are required to study and offer solutions to offset rising prices for animal feed meal and fertilisers.

"The government has discussed the measures since last week, and a conclusion is likely to be submitted and considered by the cabinet soon," the premier said.

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