Explain palm oil policy

Explain palm oil policy

Prime Minister Prayut Chan-o-cha may retire from the army in several years, but he will always be at heart a military man. As such, under his leadership we have seen the growing footprint of soldiers in civilian society. Whenever there are floods, soldiers are deployed to help evacuate people. When the price of vegetables jumped earlier this month, soldiers grew coriander and chillies for distribution.

And this week, when 400,000 truck drivers threatened to go on strike, the PM ordered that army trucks be prepared to double as delivery vehicles. Hopefully, that was just a spur of the moment plan because this did nothing to resolve the current problem with fuel prices. It might be easier if the government could just handle the problem at its core by revising some taxes and levies on diesel oil.

The news of the army planning to handle deliveries made headlines nationwide. Critics wondered whether 3,400 army trucks could handle such a mammoth task. Yet, the country watched on unblinkingly as the Land Transport Federation of Thailand (LTFT) stressed that it really would go on strike on Dec 1, after the government refused its demand to keep the diesel price at 25 baht per litre, instead of 30 baht.

The LTFT said if it were to reduce the excise tax and subsidies paid to palm oil blends, the government could shave 5 baht off the price per litre. But the federation walked away empty-handed as the government shrugged off its proposal, and then borrowed 20 billion baht from the state Covid fund to help maintain the diesel price at 30 baht.

This has brought the controversial issue of subsidising palm oil prices to the foreground.

For over a decade, the government required that palm oil be blended with diesel, and ethanol with benzene. This policy helped boost the price of these energy plants while also lowering imports of fossil fuels and cutting down air pollution.

The problem is that when palm oil prices jumped, fuel costs were also driven up to unnecessarily high levels, leaving the policy vulnerable to attack, especially at a time of skyrocketing global oil prices.

As consumers suffered, Pansak Jitrad, president of the committee on palm oil and energy plants at the National Farmers Council (NFC), was quoted on Nov 17 in Thansettakij, a local business newspaper, as praising the government's energy policy for wisely using palm oil to fuel state power plants, as well as the diesel blends.

He said 2021 would rank as the best year for local palm oil prices in a decade. On the rising cost of diesel oil, Mr Pansak argued that the palm oil industry was being targeted by the media and logistical transport sector based on rumours and unfair criticism.

The problem is not the palm oil farmers nor the truck drivers but the government -- particularly the Ministry of Energy. Consumers deserve to know why they must pay higher costs to use palm oil blends? Is it a cleaner energy policy, or a plan to shore up farm prices? Is it part of the government's plan to reduce fossil fuel consumption? Above all, is it possible to suspend it for briefly until global oil prices settle down?

These questions have not been answered. Instead, the prime minister chose to summon soldiers to carry out the job of truck drivers, sweeping the real problem under the carpet.


Bangkok Post editorial column

These editorials represent Bangkok Post thoughts about current issues and situations.

Email : anchaleek@bangkokpost.co.th

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