New tax to encourage B20 use

New tax to encourage B20 use

Palm-based biodiesel B20 is to go on sale at petrol stations from July 1. SOMCHAI POOMLARD
Palm-based biodiesel B20 is to go on sale at petrol stations from July 1. SOMCHAI POOMLARD

The Excise Department is imposing a tax on B20 biodiesel that is 82 satang lower than the B7 tax in a push to make the former’s retail price three baht per litre cheaper than the latter’s, says a senior official.

The Oil Fund will subsidise the remaining 2.18 baht a litre, said Tibordee Wattanakul, director of the Bureau of Tax Collection Standards and Development. The fund is projected to use 3 billion baht a year for the subsidy, Mr Tibordee said.

The Excise Department will tax B20 at 5.12 baht a litre, he said.

B20, a 20% palm-based biodiesel blended with 80% diesel, is to be available at petrol stations from July 1. The use of the new biodiesel blend is meant to absorb the surplus of palm oil, which surged to a stock of 600,000 litres in May from 400,000-500,000 litres typically. The lower B20 price is an incentive for consumers to use the new fuel.

Most large trucks are compatible with the new fuel, Mr Tibordee said, adding that 30 truck fleets have expressed interest in using B20.

B20 usage is expected to hit 1.5 million litres a day or 45 million litres a month, representing 2.5% of the overall monthly diesel consumption of 1.8 billion litres.

Regarding the cabinet’s recent resolution to raise excise taxes on B7 by 0.13 per litre, from 5.85 to 5.98 baht, Mr Tibordee said it would have no impact because the state Oil Fund will subsidise the incremental of the excise fuel tax to prevent a rise in B7’s retail price.

The Oil Fund will spend 230 million baht a month for the compensation, he said.

In the meantime, Nutthakorn Utensute, director of the Bureau of Tax Planning, said the Excise Department’s tax revenue collection will be close to the 600-billion-baht target for this fiscal year, though revenue fell short of target by 2.28 billion baht or 0.7% during the seven months to April.

The low revenue collection could be due to the decline in beer consumption, he said.

But the excise tax on tobacco exceeded the target by 4.67 billion baht or 12.7% during October to April, largely due to the higher tax rates, Mr Nutthakorn said.

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