The cabinet on Tuesday approved revoking the subsidy on premium diesel used in luxury cars, effective from April, in a move to save on budget expenses.
Rachada Dhnadirek, deputy government spokeswoman, said the cabinet's move also aims to reduce the financial burden on the state Oil Fund, which currently subsidises the diesel price at 8 baht per litre.
According to a recent report by the Energy Ministry presented to the cabinet, the 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, a price still considered relatively high. As a result, the fund was 29.3 billion baht in the red as of March 13.
The cabinet then approved lifting the borrowing limit on March 15 for the state Oil Fund to allow for management flexibility, a move that offers the government more room to cope with surging fuel prices caused by the Russia-Ukraine conflict.
Domestic diesel consumption totals about 65 million litres per day, 1.4 million of which belongs to premium diesel.
In a related development, Ms Rachada said the cabinet approved 199 million baht being set aside from the central budget to subsidise cooking gas for three months for 3.6 million state welfare cardholders.
The cooking gas subsidy is one of the 10 measures approved by the cabinet last Tuesday to help the public cope with the rising goods, services and energy prices.
The measures, which require combined spending of 80.2 billion baht, include providing one 100-baht discount per month to 5,500 vendors and hawkers who hold state welfare cards; reducing gasohol costs by 250 baht per month for 157,000 motorcycle drivers registered with the Department of Land Transport; and maintaining the retail price of natural gas at 15.59 baht per kilogramme.
Others measures include helping metered taxi drivers under the Lom Hai Jai Diow Gun (Breathe Together) project to buy natural gas for 13.62 baht per kg; helping those who use less than 300 units of electricity per month by reducing the fuel tariff by 22 satang per unit from May to August; and freezing the retail price of diesel at 30 baht per litre until the end of April.
The cabinet also agreed to reduce the rate of social security contributions for both employers and employees under Section 33 of the Social Security Act from 5% to 1% to give employees more spending power and employers more liquidity to run their businesses.
The cabinet also cut the social security contribution rate for those insured under Section 39 of the Act from 9% to 1.9%, and for those insured under Section 40 to a range of 42-180 baht per month.
Budgets for the other nine measures have yet to be approved by the cabinet.
Ms Rachada said the government may need to support the Oil Fund in the event of an emergency to create confidence among financial institutions that extend loans to the fund for use in the government's oil subsidy scheme.