TMB Bank’s research unit, TMB Analytics has projected that last Friday’s cut in fuel prices in Thailand would stimulate people’s purchasing power, lower transportation costs in the business sector and generate more income for the state.
The National Council for Peace and Order on Friday, Aug. 29, moved to cut oil prices between Bt1-3.89 a liter but increased diesel price by 14 satang per liter, which was still lower that Bt30 a liter in a bid to assist the transport sector.
TMB Analytics has projected that the cut would affect household and business sectors and the state.
It said consumers would be able to save money from oil consumption by about Bt32 million per day, or Bt11.85 billion per year, which helps increase people’s purchasing power by Bt176 per person per year.
In the business sector, TMB Analytics said the cut would help lower energy costs by an average 0.14 percent or equivalent to Bt820 million annually.
A majority of business enterprises consume diesel more than gasoline, so Friday’s cut would benefit small-scale transportation services, for example, car rental and delivery services.
It said the state would receive more taxes collected on diesel following the cut and while consumption of diesel is much more in Thailand, it is projected that the state would receive about Bt6.8 billion more in revenue annually.
TMB Analytics suggested that if the state could help restructure prices of energy used in the industrial sector (the largest consumer) and for the sector to consume energy efficiently, it could help lower costs and at the same time strengthen the sector.
