The domestic diesel price will be reduced by two baht a litre to 29.94 baht on Wednesday morning, the oil retailers PTT and Bangchak announced on Tuesday night.
The price cut is part of the Srettha Thavisin government’s efforts to cut energy costs for consumers and businesses by reducing prices of diesel, electricity and liquefied petroleum gas (LPG), which is used as cooking gas.
The cabinet on Tuesday resolved to cut the diesel excise tax by 2.50 baht, effective until Dec 31, a decision made official later in the day in the Royal Gazette.
A litre of diesel currently costs 31.94 baht. The price comprises the ex-refinery price of 29.06 baht, an excise tax of 5.99 baht, municipal tax of 0.59 baht, an Energy Conservation Fund contribution of 0.05 baht, value-added tax of 2.09 baht, and 3.12 baht as a marketing margin for oil traders, according to the Energy Policy and Planning Office (Eppo).
Authorities have been using the Oil Fuel Fund to subsidise the diesel price by more than 8 baht a litre to keep the price at 31.94 baht, after the waiver of the 5-baht diesel excise tax expired on July 20.
Wattanapong Kurovat, director-general of Eppo, said earlier he expects energy prices to remain high through the remainder of this year, though average prices should be lower than last year when price shocks were caused by the Russia-Ukraine war.
The price of LPG is expected to remain high, though the average decreased to $479 a tonne in the second quarter, down from $644 in the first quarter, according to Eppo.
LPG prices should increase to a range of $500-600 a tonne in the fourth quarter as gas demand rises to keep homes warm during the winter.
In the power sector, the cabinet on Monday acknowledged the ministry’s plan to further cut the power tariff from 4.10 baht to 3.99 baht per kilowatt-hour (unit), said government spokesman Chai Watcharong.
The power tariff was previously set at 4.45 baht, applicable from September to December, but the cabinet last week ordered the rate reduced to 4.10 baht to relieve the financial burden on businesses and households.