Thailand considers oil tax cuts as fuel prices surge

Thailand’s government is considering cutting oil excise taxes as a last-resort measure to deal with rising global fuel prices driven by the conflict in the Middle East.

According to The Nation, officials say the immediate priority is to continue supporting the Oil Fuel Fund, which is used to cushion the impact of high energy prices on households and businesses.

The Ministry of Finance of Thailand said a reduction in fuel taxes would only be considered in extreme circumstances. Thailand’s public debt has already climbed to 66% of gross domestic product, while the fuel fund is under increasing strain because of subsidies designed to keep diesel prices low.

Excise taxes on oil products are a major source of state revenue. Officials noted that nine consecutive reductions in fuel taxes between 2022 and 2024 led to budget losses totalling more than 178 billion baht (around $5.5 billion).

Authorities are also discussing a gradual increase in the retail price of diesel, which could rise from 29.94 baht to 31.94 baht per litre, roughly equivalent to $1 per litre.

At the same time, the government is implementing energy-saving measures across the public sector. These include setting air-conditioning systems to 26–27 degrees Celsius, reducing electricity consumption in government offices, conducting meetings online and expanding remote work arrangements.

Transport-related measures are also under consideration, including optimising travel routes and encouraging carpooling to cut fuel use.

Officials warned that if the energy situation deteriorates further, additional restrictions could be introduced. These may include limits on illuminated advertising signs and possible controls on the operating hours of gas stations.

By Tamilla Hasanova