The cabinet on Tuesday gave the green light to cutting excise tax on diesel by three baht per liter for three months from February to April.
It will come into force after it is announced in the Royal Gazette.
The cabinet also approved a package of incentives including tax cuts and subsidies to promote the electric vehicle market in the country.
The package will help reduce the price of electric cars, covering cars, pick-up trucks and motorcycles by 70,000 baht to 150,000 baht each. (TNA)