PUBLISHED : 17 Jul 2023 at 04:30
A timely installation of a new government could fend off an imminent rise in diesel oil prices, according to a freight transport association.
Freight transport businesses have voiced their growing concerns with the upcoming plan by the caretaker government to discontinue the 5-baht waiver on the diesel excise tax on Thursday, a measure designed to keep transport and living costs down.
The government said it would not renew the waiver to avoid leaving the financial burden resulting from the policy to its successor.
The Land Transport Federation of Thailand earlier warned that scrapping the waiver would pressure businesses to pass on increasing transport costs to consumers.
Somkid Kingkrodklang, chairman of the federation in the Northeast, said his operators are waiting to see how the diesel price will go up if and when the waiver is lifted.
If the diesel price rises progressively, so will freight costs, he said.
He said the freight operators were already struggling in the face of high diesel prices. The hardship will only worsen if the waiver is no longer there.
Many truck businesses are in a dire strait because freight delivery jobs are few and far between at the current onset of the crop season. Freight transport orders will start coming in once the crops are harvested, which could be months away.
“Our hope is the new government will be in place sooner rather than later.
“The new administration can step in and look closely at how energy prices are structured to make them fairer,” Mr Somkid said.
The longer the uncertainty in selecting a new prime minister in parliament persists, the longer it will take to form a new government, which can pile pressure on freight transport costs, according to him.
He said the base cost of freight transport currently stands at about 500 baht per tonne of freight delivered per trip on average, which is bearable. However, every 1-baht hike in diesel oil price could send the base cost up by an additional 50 baht per tonne.