Thailand weighs fuel tax cuts on E20 ethanol, B20 biodiesel blends to ease energy price burden

Thailand is considering targeted reductions in fuel excise tax for ethanol blend (E20) and biodiesel blend (B20) fuels to alleviate the impact of high energy prices, according to Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas. The government has several tools to manage energy prices, including the Oil Fuel Fund, cooperation with oil refineries, and fuel excise tax reductions.

However, any reduction in fuel excise tax would immediately affect government revenue, requiring further borrowing to compensate for the lost income. Ekniti suggested a more targeted approach, focusing on E20 and B20 fuels, which contain high proportions of ethanol and biodiesel, respectively. These fuels are derived mainly from sugar cane and cassava, and palm oil, respectively, making them beneficial for the agricultural sector.

The government's fiscal room is limited, with only slightly more than 10 billion baht available. The government will reassess its fiscal space for the next year before deciding on additional measures.