The state freezes diesel at 30 baht per liter … in exchange for purchasing power to drive the economy – Post Today, economic-business columnist

The government freezes diesel at 30 baht per liter … in exchange to restore purchasing power to drive the economy.

Date 08 Nov 2021 time 07:31

Column on all-round economy

In the midst of moving forward to open the country, both Thailand and many others The country made people and began to return to their life of office work, schools and universities gradually opened, shopping, business travel and or domestic and cross-country travel. As a result, the logistics sector has moved back in line with the economic recovery showing signs of improvement. The side effect that they are facing is that the world oil price has seen a continuous price adjustment since the middle of last year past 70 baht per barrel. Compare Dubai Crude Oil Price in the beginning of the year to November 1, 2021, the price increased from USD 50.61 per barrel to 80.59 baht, an increase of 61.2 percent if reduced to liters (1 barrel equals 158.987 liters), an increase of approximately 6.47. baht per liter

Thailand is a country that imports 80% of the fuel, resulting in the price of the front of the pump has been increased throughout the year, comparing the beginning of the year with the current price of gasoline 95, an increase of 9.25 baht per liter or 39.78 percent, and diesel B10/B7 prices. increased by 5.50 baht per liter, or an increase of 22.74%. Fuel oil is an important factor in all sectors of the economy, especially the logistics sector, having a cost per GDP of 13.6 percent, with the cost of transportation accounting for 7.3 percent per G. DP Thailand is a country that relies on 79.3% on truck transport, while only 1.9 percent is rail transport. Hopes have to wait for the completion of the dual-track railway project across the country, but it won’t be seen anytime soon. this

However, the transportation sector uses mostly diesel using B10, which is 10% palm oil. Later, the price of palm oil is more expensive than diesel, so the proportion is reduced to B7, while the B20 diesel may be more viscous and the filter ton is faster, suitable for new trucks (initial year 2019 that can solve these problems) if endoscopy of the retail oil price using a case study “Diesel” The government has a policy to carry no more than 30 baht per liter to support the price adjustments that will affect people’s spending and tourism. It may impede the country’s opening up and economic recovery in exchange for capital expenditure and market devaluation.

Understand that now the capital fund is less than 7 billion baht, the latest Fuel Fund Administration Committee (Korbon) has agreed to borrow another 20 billion baht. If the cabinet approves, it will allow at least the price of diesel fuel to be fixed. 6 months until around April next year Under the assumption that the world oil price does not exceed $90 per barrel, the latest (11 November 21) Dubai and WTI prices have dropped to near $80. This could help to buy some time, but Still far from the price that transport operators protested and demanded to freeze B7/B10 diesel at no more than 25 baht per liter, we must admit that the price of diesel fuel since mid-January 2021 has been over 25 baht per liter throughout May. Jumped to 27.50 baht, June 28.59 baht, July 29.29 baht, the latest (November 1, 64) adjusted to 29.69 baht, a price subsidized by the government, indicating that in the past most transport operators have adjusted to a certain extent.

If comparing diesel prices with neighboring countries, it was found that Thai oil prices were higher. From direct inquiries, the latest price of Malaysia’s diesel fuel is 17.24 baht per liter in Thai currency, 27.30 baht per liter in Vietnam, 29.275 baht per liter for Lao PDR, and 27 baht per liter in Myanmar at Myawaddy Province, adjacent to Mae Sot district, but the price In Yangon, 25.35 baht, both countries import mostly fuel from Thailand, but the price is cheaper. For Cambodia, understand that the diesel price is 32.64 baht per liter.

I wonder why Thai diesel prices are higher than the villagers. Take a look at the Thai diesel price structure as of October 29, 64, the price in front of the refinery is 21.66 baht per liter, but the gut has excise tax at 5.99 baht per liter, municipal tax 0.599 baht, VAT 1.94 baht, a reduced marketing fee. Then 1.40 baht, the contribution to the fund is only one satang. It can be seen that the government still has a gap to reduce the price of diesel fuel, assuming that the tax price is reduced. The excise tax will be reduced by half, which will reduce the price of diesel fuel at least 3 baht per liter. Thais use diesel fuel on average about 60 million liters per day. The tax money, which is the government’s income, will be lost 5,580 million baht per month. The excise tax reduction in the past, the previous government. It used to be used in order not to affect the villagers and the economy.

Now let’s see how much higher oil prices have affected the transport operators. For example, a case study of the total cost of transportation has an average cost of diesel fuel about 20%, but some businesses may reach 25-30% depending on the service life of the vehicle and the nature of the business. In addition, there is an average of 3.7% of expressway costs, approximately 7.81 percent of maintenance and tire changes, 15.9% of salary and travel expenses, and interest, building-truck-replacement depreciation and other expenses. other depending on each business From the above case study, if the diesel fuel price at the beginning of the year compared to the present is higher by 5.50 baht per liter, it will affect the total transportation costs around 4.50%, which will definitely affect the business performance.

The question of how the rising cost of diesel affects the level of product prices that will affect people. A model was created using a sample of 852 trucks as both trailers and solid vans. The average freight cost was approximately 0.5-1.0% in the selling price. 2018 of the NESDB stated 7) Depends on the price of transportation, which is mostly fixed price that does not vary according to the value of the goods being loaded. If the product is of high value, the cost of transportation per selling price is low. If the product is not of much value, the cost of transportation is high. For example, medical devices-electrical appliances, the average cost of transportation per selling price is about 0.5%, food and raw materials are about 0.575 percent. , 2.185% plastic resin, 1.2% iron and spar parts, etc.

This paper is a case study that uses real data from transportation businesses to point out that, under a recovering economy and the vulnerability of both the retail and manufacturing-services sectors to stable purchasing power, “Demand” The demand for products has not returned as before the Covid-19 crisis. The production capacity (CPU) of the industrial sector still remains. Oil is a key factor in industrial sectors such as boilers and furnaces, as well as the cost of freight, which is now rising horribly. However, in the transport sector, there are still a large number of parked cars, causing intense competition, especially in terms of price. Over the past year, oil prices have been rising all the time, but it is difficult to adjust prices during unfavorable times, causing some operators to be affected.

This article points out that the need for the government to freeze the price of diesel B7/B10 at no more than 30 baht per liter, even though it has to borrow money to make the oil fund have enough money to support the price for at least the next 6 months. page Diesel prices carried by the government in the industrial sector have little impact due to the relatively low ratio of transportation costs to selling prices. Moreover, the situation of the transport operators and the manufacturing sector does not encourage price adjustments, therefore, there is no reason for the retail sector, both large and small, to have an excuse to adjust the prices of goods, which will affect the spending situation. of people who are weak This article may contain information that most of the authors compiled….the credibility depends on the reader…take it yourself.

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