Diesel Relief Sought for Agricultural Sector
Jul. 14–The Energy Ministry and the Agriculture Ministry have joined forces to search for ways to help the farm sector get access to cheap diesel after the government ended a subsidy and retail pump prices in greater Bangkok rose 90 satang per litre yesterday.
Farmers, who are low-income earners, should get a helping hand or they will suffer severely from the rising diesel prices.
Metta Bantherngsuk, secretary general of Energy Policy and Planning Office, said low-grade diesel with high sulphur content of 0.5 percent, mostly consumed by ocean-going vessels or held for export, can go to the farm sector.
It sells for 60 satang per litre less than at the pumps, which stock diesel with a sulphur content of 0.035 percent or less.
Subsidised diesel with low sulphur is usually purple to distinguish it from the fuel sold at service stations, and is supplied to fishing vessels at a lower price.
Mr Metta said Thai Petrochemical Industry (TPI) could produce 60 to 80 million litres of low-grade, higher-sulphur diesel per month. PTT Plc and Bangchak Petroleum Plc are willing to buy the fuel from TPI and supply it to the farmers.
However, a saving of 60 satang per litre may not help farmers much. Funds are to be set up to help farmers with price support, mortgages on future crops, or straight subsidies of diesel to make the fuel cheaper.
Officials from both ministries have been charged to come up with more ideas before supplying cheaper diesel to the farm sector, such as identifying which agencies should be responsible for supplying fuel to the farmers, and listing farm products eligible for cheaper fuel.
In the farm sector, diesel is used to power ploughs, the farm trucks known as e-tan, water pumps, power generators and rice-milling machines.
Mr Metta said a levy up to one baht per litre might be imposed on diesel once again, to help to clear some of the 85-billion-baht debt of the oil fund. Previously, a levy of 50 satang per litre collected from diesel sales helped raise the monthly inflow of 1.7 billion baht to the oil fund.
The huge debt was incurred while the government kept its subsidy on diesel in the face of rising world prices, fearing that the fuel, vital to many economic sectors, could become so costly it would be a setback to the government.
The government planned to refinance the debt by issuing bonds with maturity ranging from one to five years.
There were fears the bonds would be unattractive if the government kept subsidising cooking gas, but Mr Metta said the end of the diesel subsidy should end investors’ fears. The cooking-gas subsidy is about 450 million baht per month, minimal compared with diesel subsidies which ran to 1.7 billion baht.
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